Cause & Effect of European Exploration

Cause & Effect European Exploration Essay Throughout history, people have been curious about finding new land and exploring. Many different factors stirred interest in colonization and exploration for Europeans. During the 15th and 17th centuries Europe was changing rapidly and had its own reasons for growth. All of Europe had the excitement and hesitation of finding new places. There were many reasons for Europe to grow and expand, some of the causes for Europe’s expansion were; a search for new trade routes, religion, new technology, the desire for new products and gold.Europe wanted to find a new trade route to Asia because they wanted the silk, spices, jewels, and riches from China and India that were very valuable. One of the problems that were faced was that when they arrived in Western Europe, the products had been taxed so many times along the way that they were extremely expensive. They wanted to find a route around so that they could get the goods first. They wanted to find a northwest passage.Christian rulers in Europe wanted to spread their religion of Christianity throughout the overseas exploration, they felt they had a duty to keep fighting for Muslims but also to convert non- Christians throughout the world. Bartolomeu Dias (Portuguese explorer) said that his motive was â€Å"to serve God and His Majesty, to give light to those who were in darkness and to grow rich as all men desire to do. † European explores had better navigation skills and equipment to help them find their way.They had a compass and moveable rudder which allowed the explorers to sail even further than before. They also used an astrolabe which used the stars to determine how far north or south they were from the equator. European explorers were on a mission to find these new lands and new technologies, those causes stimulated effects for the aftermath of the exploration. One of the effects on European exploration was the Columbian Exchange. This exchange consisted of trading between the Americas, Europe, Africa and Asia.The Americas sent over squash, pumpkins, turkey, peanuts, potatoes, tomatoes, corn, sweet potatoes, peppers, tobacco, pineapple, cacao, beans and vanilla. Europe, Africa and Asia sent over citrus fruits, bananas, grapes, sugar cane, honeybees, onions, olives, turnips, peaches, pears, and coffee beans. They also sent over items other then food such as grains, wheat, rice, barley and oats. They sent many types of live stock and a huge thing they sent over was disease. The Triangle Trade was another trading system between New England the West Indies and West Africa.New England sent West Africa rum, guns/ gunpowder, cloth and tools. West Africa sent sugar and molasses to New England and New England sent back livestock, lumber, flour and fish. As the trading increased during the sixteenth and throughout the eighteenth century, millions of people were taken out of their home and deported to plantations in the New World. Europeans r isked their lives to explore new lands, the expansion abroad come with hopes for land, riches and social advancement.

Lady Macbeth Character analysis Essay

Lady Macbeth Essay â€Å"A dynamic character is an individual that undergoes a drastic character change or revelation.†[1] Lady Macbeth is an ideal example of this kind of character. At the beginning of the play Macbeth, written by Shakespeare, Lady Macbeth can be perceived as a manipulative and deeply ambitious person, which implies an overall sinister-like quality. However, as the play progresses, Lady Macbeth’s character changes to one that seems deeply regretful for her actions. Through Lady Macbeth’s interactions and statements the reader views her transformation from a sinister being into a remorseful soul. In the opening of the play, Lady Macbeth is an extremely manipulative individual that essentially has the power to control her husband’s actions. This is evident through the plot and ultimately the death of King Duncan. Lady Macbeth insulted her husbands manhood stating: â€Å"What beast was’t then that made you break this enterprise to me? When you durst do it then you were a man; And to be more than what you were, you would be so much more the man†¦Ã¢â‚¬ (I, VII, 52-64). This statement reinforces her manipulative manner, which provides crucial and important information about Lady Macbeth’s character. In essence, this attack towards Macbeth introduces a pivotal theme of the play: the relationship between gender and violence. Lady Macbeth links masculinity to violence and thereby she has to resort to influential measures in order to achieve her goals. She claims that he is not manly enough because he is hesitant of performing the violent deed of murdering the King. Her mockery of her husband serves a dual purpose of developing her as well as Macbeth’s character. The sarcastic tone reveals the dominating personality of Lady Macbeth, which is significant in influencing Macbeth during later part of the play to succumb to darkness of treachery and bloodshed. Which also intensifies her fiendish attributes. Lady Macbeth has the ability to override all her husband’s hesitation and manipulate him into undertaking these murderous acts. Thro ugh persuasion and criticism she was able to manipulate her husband thereby suggesting elements of evil and sinister-like qualities in Lady Macbeth. There is a defined relationship between manipulation and ambition in this play. That is, Lady Macbeth’s ambition drives her to persuade her husband into the murdering of innocent people. The first example of her determination is apparent in her  soliloquy, which is started off with a tone of certainty and conviction. â€Å"Glamis thou art, and Cawdor; and shalt be what thou art promised.† (I, V, 14-29) Ironically, this tone does not alleviate the strength of her character but instead makes the reader wary of her. This draws the reader’s interest and creates a feeling of the oncoming evil that seems inevitable. Hence, the reader can indicate the instrumental role that Lady Macbeth is going to play in the build up of darkness later on. But the primary example of her ambitious behaviour is evident in the plot for her husband to become king. As claimed by the witches, Macbeth would be king, however the means of how this would become was never discussed until Lady M acbeth is introduced. When the reader is first introduced to her, she is asking for spirits to â€Å"unsex me†(I, V, 44). â€Å"The language suggests that her womanhood, represented by breasts and milk, which are usually symbols of a nurturer, prevents her from performing acts of violence and cruelty, which she associates with manliness.†[2] This also reinforces the link between gender and violence. This statement displays the immense ambition she has to become queen, demonstrating she will go to any lengths in order to accomplish her goal. The devised plan by Lady Macbeth further shows her great ambition to become Queen of Scotland. Lady Macbeth states to Macbeth: â€Å"O, never shall sun that morrow see!† (I, V, 67-68) referring to the murdering of King Duncan providing evidence of her great ambition. Lady Macbeth is so blinded by her ambitions that she neglects to ponder the potential consequences her actions may have on her and Macbeth himself. This intense and unwavering ambition of what might be to come forces her to place whatever values, morals and good judgment on hold, however it is also her blind ambition that leads to her fast approaching downfall. Aside from Lady Macbeth’s sinister tendencies, there is proof that suggests that there is a compassionate and guilty feeling individual buried inside. The first piece of evidence, which suggests of a remorsef ul Lady Macbeth, is apparent through her statement: â€Å"where out desire is got without content.†(III, II, 7). This passage refers to the lack of fulfillment the role of queen posses, and hints that all her actions were meaningless thereby implying remorseful feelings. Another crucial indication of her guilt is visible in Act Five, Scene 1 when Lady Macbeth is wondering around in a trance state appearing to be sleep walking. It is at this point in time where we indisputably learn of her deepest  regrets and guilt. This is evident when she is heard saying: â€Å"Out, damned spot† (V, I, 32) suggesting that she is unable to wash the blood off her hands. These actions play a central role in the reinforcement of another theme: appearance versus reality (Lady Macbeth appears to be wide-awake, however, she is in a state of near unconsciousness revealing the reality of her thoughts). These regretful feelings inherently lead to her downfall through her suicide. By dying by her own hand she is paying the greatest cost for the consequences of her actions. Here underlies the truth to her character, she inherits a change of heart resulting in indisputable evidence that Lady Macbeth is a dynamic character. In conclusion, through Lady Macbeth’s interactions and statements the reader gains tremendous insight into her true character. As the play progresses and character revelation occurs, we see her change from an individual that is deeply ambitious and persuasive to a regretful and remorseful s oul. This thereby provides as adequate proof that Lady Macbeth is a dynamic character. This change creates a sense of sympathy in the eyes of the reader; and consequently it is her actions that cause her own ultimate death. Sources: http://www.shakespeare-online.com/plays/macbeth/ladymacbeth.html http://www.shmoop.com/macbeth/lady-macbeth.html [2] http://www.sparknotes.com/shakespeare/macbeth/canalysis.html [1] Dynamic character defined by (www.dictionary.com)

Bajaj Case Study

Financial Management at Bajaj Auto Bajaj Auto Limited is one of India's largest two-wheeler manufacturers. As the dominant player until the early 1990s, Bajaj's market share declined from 49. 3% in 1994, to 38. 9% in 1999 with the entry of major competitors like Hero Honda. Bajaj has initiated several measures to regain its market share and strengthen its competitive position. The case discusses the financial strategy pursued by Bajaj. Financial Management at Bajaj Auto We want to get back the leadership position in the two-wheeler segment and will use the cash if required to do so.However, in current volatile market conditions (not to forget the Japanese and their huge cash reserves), we would rather have the security of cash any day. We are competing not only with Indian companies, but also with large foreign two-wheeler companies, many of whom have much deeper pockets than ours. While our surplus cash will assist us in future growth, it also acts as a deterrent to others from indu lging in predatory pricing tactics – Sanjiv Bajaj, Vice-President Finance, Bajaj Auto Limited. 1 IntroductionIn 2003, Bajaj Auto Limited (Bajaj) was one of India’s largest manufacturers of both two and three-wheelers. The three-wheelers, also known as autorickshaws, were unique to the South Asian region. The company recorded revenue of Rs. 5125. 73 crores representing a 13% increase over the previous year 2. Once the unchallenged market leader, Bajaj trailed Hero Honda in the late 1990s. Bajaj’s market share declined from 49. 3% in 1994, to 38. 9% in 1999. 3 Thereafter, Bajaj had initiated several measures to regain its market share and strengthened its competitive position.In 2003, Bajaj had a workforce of 12,000 employees and a network of 422 dealers and over 1,300 authorised service centers. 4 The Indian Two-Wheeler Industry Two-wheelers had become the standard mode of transportation in many of India’s large urban centers. Use of two-wheelers in the ru ral areas had also increased significantly in the 1990s. The birth of the Indian two-wheeler industry could be traced to the early 1950s, when Automobile Products of India (API) started manufacturing scooters in the country.While API initially dominated the scooter market with its Lambrettas, it was Bajaj which rapidly emerged as the unchallenged leader in the scooter industry. A number of government and private enterprises who entered the scooter segment, had disappeared from the market by the turn of the century. The License Raj that existed prior to economic liberalization (1940s-1980s) in India, did not allow foreign players to enter the market, making it an ideal breeding ground for local players. But the Raj also hurt the growth of the industry by imposing various restrictions.In the mid-80s, the government started permitting foreign companies to enter the Indian market, through minority joint ventures. During this period, the twowheeler market witnessed a boom with Japanese p layers like Honda, Suzuki, Yamaha and Kawasaki, entering the market through joint ventures. 1 2 3 4 M. Anand, ? Is Munjal Being Too Generous Businessworld, 19th May 2003. B1 Source: Prowess Database. Gita Piramal, Sumantra Goshal and Sudeep Budhiraja, ? Transformation of Bajaj Auto Ltd,? Lessons in Excellence Case Contest, www. thesmartmanager. om, February-March, 2003. Source: Bajaj Auto Limited Annual Report 2003. 109 Financial Insights Figure (i) Indian Motorcycle Market Source: Honda Annual Report 2003. Foreign players quickly changed the rules of the game. From a supplier’s market, it became a buyer’s market. Companies tried to outdo each other in terms of style, price and fuel efficiency. The technological expertise that the foreign collaborators brought to the market place helped increase the overall quality of the products quite significantly. In the early 2000s, the competition intensified further.In 2000, Honda announced its intentions to set up a 100% subsid iary to manufacture scooters and motorcycles. Exhibit I Comparative Valuation of the Leading Companies Source: Motilal Oswal, Equity Research, February 2003. The Indian two-wheeler industry witnessed remarkable growth rates since 2000, due to a host of factors like fall in interest rates, availability of finance and affordable prices relative to the growing purchasing power. Despite the impressive growth rate of the last few years, two-wheeler penetration still remained low in the country.Analysts believed, increasing urbanization, expanding cities, lack of other modes of transportation and favourable demographics would support double-digit growth in the coming decade. The Indian two-wheeler industry could be broadly classified into three major segments— scooters, motorcycles and mopeds5. Until the early 1990s, locally manufactured scooters with gears dominated the markets. But in recent times, demand 5 Mopeds were small motorcycles, with less engine power which were priced l ow and were aimed at the low-income market. 110 Financial Management at Bajaj Auto or scooters had tapered off, while that for motorcycles looked buoyant. The motorcycle market in India had about tripled in size over the past 10 years 6. In 2002, the two-wheeler industry demand totaled 5 million units, making India the second largest market in the world after China 7. Exhibit II Two Wheelers Industry: Changing Dynamics Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total Two wheelers (unit sold) 1,503,172 1,763,210 2,208,231 2,660,005 2,965,474 3,042,347 3,403,471 3,776,719 3,745,516 4,318,531 5,053,562 Geared scooters 41. 8% 43. 3% 42. 6% 40. 6% 38. 4% 35. 4% 32. % 25. 9% 16. 0% 12. 3% 6. 7% Ungeared scooters 9. 4% 7. 9% 8. 6% 9. 1% 8. 9% 8. 8% 8. 3% 10. 0% 10. 9% 9. 5% 10. 5% Motorcycles 20. 2% 21. 6% 23. 9% 24. 8% 27. 1% 30. 0% 34. 6% 42. 7% 54. 1% 66. 2% 74. 4% Mopeds 20. 0% 17. 6% 15. 1% 16. 8% 16. 5% 15. 5% 14. 6% 14. 1% 12. 9% 8. 7% 6. 2% Stepthrus 8. 6% 9. 6% 9. 8% 8. 7% 9. 1% 10. 3% 9. 8% 7. 3% 6. 1% 3. 3% 2. 2% Source: Bajaj Auto Annual Report 2002-03. Background Note The Bajaj group was founded by Jamnalal Bajaj in the 1930s. His eldest son Kamalnayan established Bajaj Auto, the flagship of the Bajaj group, in 1945, as a private limited company.From 1948 to 1959, Bajaj imported scooters and three wheelers from Italy and sold them in India. In 1959, the company obtained a license to manufacture scooters and motorized three wheeler vehicles. In 1960, it entered into a technical collaboration with Piaggio of Italy and got the right to manufacture and market Piaggio’s Vespa brand scooters and three wheelers in India. The same year, it went public. Bajaj’s first full-fledged manufacturing facility at Akurdi (Bombay-Pune Road) was inaugurated in 1960. Scooter production commenced in 1961, followed by three wheeler production in 1962.Bajaj’s scooters and three wheelers started selling under the Bajaj brand name only in 197 1, when the agreement with Piaggio expired. Till the 1980s, Bajaj scooters were so popular that the basic strategy was long production runs along with a constant focus on costs. In 1984, Bajaj established its second plant (1000-acre plant) at Waluj, Aurangabad. Scooter production at this plant started in 1986, followed by three wheeler production in 1987 and scooterettes and motorcycle production in 1990 & 1991, respectively. 6 7 Source: Honda Annual Report 2003.China was number one with an annual production and sales of over 10 million. 111 Financial Insights As Bajaj’s products were in great demand, the company did not feel the need to introduce new products or upgrade its old models. The Chetak, which accounted for 60% of Bajaj’s scooter sales, did not even have an electronic ignition. The model’s 2stroke engine also had an emission problem that was quite serious by international standards. As competition became intense and the market was flooded with increas ing numbers of models, Bajaj’s market share declined.During this period, Bajaj also followed a highly centralized, paternalistic management style. In the early 1990s, as the motorcycle market began to expand and became an attractive proposition, Bajaj lost ground. Though Bajaj had a presence in the motorcycle segment with its KB100 and 4S Champion, it did not take the segment seriously enough. Bajaj believed, motorcycles were a temporary aberration and people would return to scooters. But the scooter market kept shrinking and Bajaj was relegated to fourth place in the motorcycle market. Exhibit III Comparative Analysis: Motorcycle Sales (Number)Year 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Bajaj Auto 32,028 34,672 42,080 75,067 89,675 129,263 137,717 200,132 255,129 421,966 670,117 % Share 10 14 14 17 16 18 17 19 17 22 23 Hero Honda 134,801 127,803 150,456 183,131 230,194 168,936 407,563 530,607 761,700 1,029,391 1,425,302 % Share 44 51 50 42 40 38 50 50 50 53 5 0 TVS Motors 33,744 30,085 42,080 53,120 125,286 164,083 211,667 268,099 326,357 354,497 450,113 % Share 11 12 18 20 22 23 26 25 21 18 16 Others 108,601 59,066 56,894 89,643 132,922 146,625 60,674 64,529 177,704 123,472 312,547 Total 309,174 251,626 302,550 435,053 578,077 708,907 817,621 1,063,367 1,520,890 1,929,326 2,858,079Source: Society of Indian Automobile Manufacturers. In the late 1990s, Bajaj with the support of Kawasaki, started producing motorcycles. The result was an aggressively priced Boxer 100cc motorcycle in 1997, about Rs. 8000 cheaper than Hero Honda. As Bajaj’s volumes increased, it started pushing prices down by value engineering, localization and better capacity utilization that cut its costs by Rs. 4000 per vehicle. Exhibit IV Bajaj: Major Models Category Motorcycle Wind BYK Pulsar Eliminator 112 Products Year of Introduction 2003 2003 2002 2001 Financial Management at Bajaj Auto Category Caliber Products Boxer CT Boxer AT 4S Champion KB 100 LegendYear of Introduction 1998 1997 1997 1991 1987 1998 1976 1972 2000 1998 1990 1986 1987 Geared Scooters Super Chetak Saffire Ungeared Scooters Spirit Sunny M80 Major M80 Major 4S Step-Thrus Source: www. bajajauto. com In early 1998, Bajaj established a new plant (Rs. 3. 15 billion investment in 200-acre plot) at Chakan near Pune for its future generation vehicles. The new plant specialized in plastic bodied and tubular structure scooters. Bajaj’s relatively high level of backward integration helped it to keep raw material costs well below the industry average. For example, the company bought raw materials in bulk for itself as well as for its suppliers.For most of the two-wheeler companies, material costs accounted for about 70% of operating income, but for Bajaj it was only 57% in 1998, the lowest in the industry. In 1998, Bajaj was ranked India’s fifth most valuable company 8. Internationally, it was the world’s largest scooter producer and the fourth largest two-whe eler manufacturer after Hero Honda, Yamaha and Suzuki. But the delay in realizing the potential of motorcycle segment by Bajaj, allowed Hero Honda to race ahead to become the market leader in 2001. During 2000-01, Bajaj entered into non-life and life insurance business along with Allianz AG of Germany, one of the largest insurance companies in the world. Two companies were set up: Bajaj Allianz General Insurance Company Ltd and Allianz Bajaj Life Insurance Company Limited.Bajaj and Allianz signed two separate joint venture agreements for these two businesses and respectively committed 74% and 26% of the initial share capital of Rs110 crore in case of the general insurance venture and Rs150 crore in case of the life insurance venture. Bajaj received Rs. 1. 17 billion from Allianz as goodwill. In 2001-02, Bajaj Allianz General Insurance issued the largest number of policies among all private players in the non-life segment, and became the leader in this line of business. Allianz Bajaj Life Insurance commenced operations in October 2001. 8 ?The BT 500,? Business Today, 7th September 1998. 113 Financial Insights Exhibit V Bajaj vs. Competitors: Major Models in Different Segments in 2003 Segments BYK Economy (Priced Rs. 27,000 – Rs. 37,000) Executive (Priced Rs. 38,000 – Rs. 5,000) Premium (Priced Rs. 45,000 – Rs. 75,000) Style (Priced above Rs. 75,000) Boxer AT Boxer AR (K-Tec) Boxer CT Delux (KTec) Caliber (K-Tec) Caliber Croma Caliber 115 Pulsar 150 Pulsar 150 (self-start) Pulsar 180 CD100 SS Dawn Splendor Passion Ambition Disc CBZ Disc CBZ (selfstart) Bajaj Auto Hero Honda TVS Motors No Competition Samurai Max 100R Max DLX Victor Fiero Fiero DLX Fiero ES Crux Crux R Libero Enticer Yamaha Eliminator No Competition Note: List is not exhaustive. Source: Compiled from various sources by ICFAI Knowledge Center. The shift in preference from geared to nongeared scooters continued in 2002, resulting in a 35% decline in yearly sales.The company†™s market share in the ungeared scooter market declined due to lack of models. Both LML and Honda Motorcycles strengthened their foothold in 2002 after the launch of ‘Nova' and ‘Dio' respectively. Bajaj Auto's ‘Spirit', the ungeared scooter, commanded around 25% market share in the below 100 cc category. Bajaj was one of the very few companies manufacturing three-wheelers in the world. It commanded a monopoly in the domestic market with a market share of above 80%. The rest was shared by Bajaj Tempo, Greaves Ltd and Scooters India. The company saw a sharp rise in three-wheeler demand. In early 2002, the market grew by 23%. Bajaj had also commenced the commercial production of goods carriers.In 2002, this segment generated 22% of the company’s profits. The profit per three-wheeler was estimated to be 2. 5-3 times that of a motorcycle. Bajaj gained market share in the motorcycle segment through its models like ‘Pulsar' and ‘Boxer AR'. Boxer virtu ally created the four-stroke economy segment and Pulsar expanded the lifestyle segment. Pulsar’s volumes surpassed the most optimistic expectations in terms of volumes. In February 2003, Bajaj launched ‘Caliber 115' and steadied its presence in the executive motorcycle segment. The new model registered sales of 25,706 units in March 2003. 114 Financial Management at Bajaj Auto Financial ManagementBajaj earned bulk of its revenue from the automotive business. In 2003, motorcycles dominated the automotive segment, accounting for 55 % of its revenues. In 2002-03, Bajaj achieved a turnover of Rs. 5071 crore and earning before interest, taxation, depreciation and amortization (EBITDA) of Rs. 817 crore. EBITDA as a percentage of net sales and other operating income increased from 16. 8 % in 2001-02 to 19 % in 2002-03. Return on operating capital, which had dipped to a low of 14% in 2000-01, increased to 60% in 2002-03. Bajaj continued its efforts to drive top-line growth, imp rove operational efficiency, cut costs and improve economies of scale.Working Capital Bajaj continued to minimize its overall working capital. Debtors declined from Rs. 198 crores on 31st March 2002, to Rs. 167 crore on 31st March 2003 – a reduction of 16%. Bajaj succeeded in reducing inventory levels by using the direct on-line delivery of materials from vendors. Inventory of raw materials and components declined from seven days as on 31st March 2002, to six days as on 31st March 2003, and spare parts for replacement market from 42 days to 31 days. The inventory of finished goods however increased from six days to nine days because of the sluggish market. 9 Exhibit VI Bajaj: Operating Working Capital (Rs Million)Source: Bajaj Auto Annual Report 2002-03. Cost Structure Raw materials, advertising and marketing, and indirect taxes (excise, etc) were the major cost heads for Bajaj. During 2002-03, through its continuous efforts in value engineering and improving relations with t he vendors, Bajaj was able to reduce its 9 Bajaj Auto Annual Report 2002-03. 115 Financial Insights material costs. The share of materials to net sales and other operating income reduced from 63. 3 % in 2001-02 to 62 % in 2002-03, while the share of stores and tools was contained at 1. 5 % of net sales and other operating income. 10 Labor costs for 2002-03 included a sum of Rs. 461 million (Rs. 3 million in 2001-02) towards compensation paid to employees under the voluntary retirement scheme. A total of 1,106 employees opted for the scheme, which had a payback period of two years. Bajaj’s labor costs made up 4. 66% of its total revenue in 2002-03. 11 Despite a 16. 5% increase in net sales and other operating income – from Rs. 36. 96 billion in 2001-02 to Rs. 43. 06 billion in 2002-03, factory and administration costs had come down from 5. 3% of net sales and operating income to 4. 3%. This was the result of a thorough review of fixed costs with each plant head. Sales a nd after sales expenses were around 6. 7 % of net sales and other operating income. In 2003, Bajaj’s advertising and marketing expenditures were Rs 233. 9 crore (8. 61% of its total revenue), whereas Hero Honda’s expenditures were Rs. 147. 01 crore (4. 16% of total revenue) and TVS’ were Rs. 212. 49 crore (11. 06% of total revenue). Bajaj’s total indirect tax expenses were Rs. 601. 22 crore in comparison to Hero Honda’s Rs. 9. 75 crore and TVS’ Rs. 435. 77 crore in 2003. 12 Investments Bajaj invested its surplus funds in secured and fixed investment securities like G-Secs, T-Bills, etc. The return earned by Bajaj on its treasury portfolio was comparable with the return earned by the top mutual funds. During 2002-03, Bajaj reduced its equity investments and concentrated more on the G-Sec and bond market.Thus, the market value of the portfolio changed from a diminution in value to cost in 2002, to an appreciation in value to cost of Rs. 343 mi llion in March 2003. During 2002-03, Bajaj provided Rs. 26. 7 million towards impairment in the carrying costs of its investment portfolio. In addition, continuing its efforts to liquidate non-performing assets, Bajaj booked a total loss of Rs. 853 million. This loss was set off against gains on sale of assets of Rs. 1, 067 million that resulted in a net gain of Rs. 214 million. 13 Figure (ii) Bajaj: Liability Structure, 2003 Source: Prowess Database. 10 11 12 13 Bajaj Auto Annual Report, 2002-03. Source: Prowess Database.Source: Prowess Database. Bajaj Auto Annual Report, 2002-03. 116 Financial Management at Bajaj Auto Exhibit VII Bajaj: Investment of Surplus Funds (Rs. million) Source: Bajaj Auto Annual Report, 2002-03. Exhibit: VIII Income from Investments (Rs Million) 2002-2003 Dividends Interest on debentures and bonds Interest on government securities Interest on inter-corporate deposits and other loans Income from mutual fund units Lease rent and equalization Profit on sale o f investments Interest on fixed deposits Others Total Interest on tax refunds Total non-operating income Non-operating expenses Net non-operating income Source: Bajaj Auto Annual Report, 2002-03. 17 127 408 405 239 44 214 2 11 1,450 1,450 274 1,176 2001-2002 592 291 18 364 79 234 6 1,584 18 1,602 436 1,166 Financial Insights Return on Capital In early 2003, Bajaj maintained a free cash reserve of Rs 2,700 crore. The management had no intention of reducing that cash pile in the near future. Meanwhile, analysts argued14 that retaining surplus cash would only dilute a company's Return on Capital Employed (ROCE) and, over a period of time, destroy shareholder value. Bajaj had a capital employed of Rs 4,000 crore, of which only Rs 1,300 crore was deployed in its two-wheeler operations. This generated an excellent ROCE of 60%. But the remaining Rs 2,700 crore of idle cash, earned a return of only 17%.As a result, Bajaj Auto's overall ROCE was 31%, far lower than Hero Honda's 95%. Exhibit IX Return on Operating Capital (Rs. Million) As at 31, March 2003 Fixed assets Technical know-how Working capital Total Operating profit after interest and depreciation Pre-tax return on operating capital exmployed Source: Bajaj Auto Annual Report, 2002-03. As at 31, March 2002 10,910 128 699 11,737 4,834 41% 10,502 107 638 11,247 6,744 60% Exhibit X Dividend Payouts (%) Company Bajaj Hero Honda TVS 1999 19. 18 22. 89 21. 96 2000 20. 88 23. 08 23. 92 2001 35. 69 26. 74 32. 54 2002 27. 34 75. 53 42. 47 Source: Businessworld, 19th May 2003. Capital Structure Bajaj’s debt-equity ratio was 0. 6 and interest coverage was 717. 76 times in 2003. Bajaj mostly relied on internal generation rather than external funding. In 2003, Bajaj had Rs. 3139. 42 crore of reserve & surplus (49% of it total assets), where as Hero Honda and TVS had only Rs. 821. 09 crore and Rs. 399. 85 crore respectively. Bajaj deployed bulk of its funds in investments (44. 02% of total assets) and fixed assets (20 . 57% of total assets). 14 M. Anand, ? Is Munjal Being Too Generous Businessworld, 19th May 2003. 118 Financial Management at Bajaj Auto Exhibit XI Bajaj: Equity Holding, December 2003 Equity Holding Indian promoters Mutual funds and UTI Banks, FI's, Insurance Cos.FIIs Private corporate bodies Indian public NRIs/OCBs Any other Total equity holding Source: Prowess Database. No of Shares 29516461 1612731 3829868 19318255 13264490 29054237 401776 4185692 101183510 % of Total Shares 29. 17 1. 59 3. 79 19. 09 13. 11 28. 71 0. 40 4. 14 100 In September 2000, Bajaj had spent about Rs 720 crore to buy back 15% of its equity. The offer was announced at a price of Rs 400 per share when the prevailing price was around Rs 320. Though prices fell to Rs 200 immediately after the buyback, it had later recovered to about Rs 500. Bajaj believed buy back was a better way to distribute profits to shareholders than dividends.Bajaj had a cash reserve of $ 575 million and paid a final dividend of 120% an d a special dividend of 20% in 2002 (paid on account of the one-time premia received from Allianz AG, Germany, the company's partner in the two insurance joint ventures)15 and a final dividend of 140% in 2003. The amount of dividend and the tax aggregated to Rs. 1,598 million. The company’s dividend yield i. e. , (dividend per share by the market price) showed that Bajaj had a yield of 2. 7%. 16 Looking Ahead In the motorcycles segment, ‘Boxer' had performed well and had increased its market share to 45% in the entry-level market, which was estimated at 102,000 units (35% of total motorcycle sales). But growth was primarily led by ‘Pulsar', the premium-end motorcycle. Against the company's estimate of 10,000 units per month at the beginning of 2002, the model notched sales of around 17,000 units per month in late 2002.Encouraged by the success, Bajaj planned to ramp up sales to 25,000 units per month by early 2004 and expected to achieve total leadership in the mo torcycle segment, aiming at a growth rate of 15%. Bajaj expected to improve its relationships with customers by expanding its product range and widening its dealer network. It planned to launch a 125 cc motorcycle with Kawasaki Heavy Industries Ltd, which was in the final stage of development. A rear engine diesel goods carrier was in the testing stage 15 16 Source: Prowess Database. Chetan Soni & Nandini Sen Gupta, ? Rolling stock: Payouts put auto investors in top gear,? Times News Network, 4th June 2003. 119 Financial Insights and would be launched in 2004. Bajaj also planned to broaden its vision and work towards being a truly global player.Effective management of the company’s finances would play an important role in this regard. Figure (iii) Bajaj: Closing Share Price & Traded Quantity Source: Prowess Database. Figure (iv) Bajaj: Traded Quantity Source: Prowess Database. Figure (v) Bajaj: Dividend Yield & Earning Per Share Dividend Yield 6 5 4 3 2 1 0 Dec-97 Dec-98 Dec- 99 Dec-00 Dec-01 Dec-02 Dec-03 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Earning Per Share 80 60 40 20 0 Dec-97 Jun-98 Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Source: Prowess Database. 120 Financial Management at Bajaj Auto Figure (vi) Bajaj: Assets Structure Source: Prowess Database. Exhibit: XIIBajaj: Capital History Issue Month Issue Type Face Value (Rs. ) 10 10 Security Amount (Rs. Crore) 0 0 Additional Increased Paid up Paid up Capital Capital (Rs. Crore) (Rs. Crore) 18. 81 37. 63 37. 63 75. 25 Security Type Sep-91 Bonus Jun-94 Bonus Euro Oct-94 Issue Sep-97 Bonus Equity Equity Global Depository Receipts Equity 10 10 10 345. 07 0 0 4. 34 39. 8 0 79. 59 119. 39 101. 18 Buybac Sep-00 k Equity Source: Prowess Database. Exhibit XIII Bajaj: Ratios Bajaj Auto Ratios Liquidity Ratios Current ratio Quick ratio Solvency Ratios Debt-equity ratio Interest coverage 0. 26 0. 22 0. 20 45. 04 0. 16 33. 85 0. 17 21. 23 0. 11 11. 83 0. 29 18. 43 0. 52 5. 63 0. 6 4. 58 2. 07 1. 20 1. 88 1. 01 1. 69 0. 69 1. 11 0. 16 1. 20 0. 25 1. 44 0. 81 1. 01 0. 34 1. 12 0. 47 1. 16 0. 36 2003 2002 2001 Hero Honda 2003 2002 2001 T V S Motor 2003 2002 2001 717. 76 161. 91 121 Financial Insights Bajaj Auto Ratios 2003 2002 2001 Hero Honda 2003 2002 2001 T V S Motor 2003 2002 2001 Efficiency Ratios (in Days) Average days of finished goods stock Average days of debtors Average days of creditors Net working capital cycle Profitability Ratios PBDIT (NNRT) as % of sales PBIT (NNRT) as % of sales PAT (NNRT) as % of sales Return on net worth Return on capital employed 20. 19 16. 65 11. 07 17. 50 21. 47 16. 87 13. 12 8. 63 13. 3 16. 74 13. 07 9. 18 8. 24 10. 26 9. 98 17. 59 16. 45 10. 02 67. 10 94. 64 16. 77 15. 63 9. 72 67. 67 95. 27 14. 46 13. 07 7. 87 47. 52 70. 98 9. 23 6. 66 3. 94 32. 89 42. 10 6. 79 4. 57 2. 47 8. 18 5. 78 3. 47 9. 90 13. 80 42. 40 -5. 68 10. 27 13. 95 43. 47 0. 69 11. 38 15. 42 49. 54 6. 61 3. 91 8. 62 35. 57 -7. 47 3. 53 5. 80 32. 71 - 4. 79 3. 93 4. 28 31. 10 14. 09 8. 14 52. 96 14. 97 13. 13 15. 95 19. 82 52. 05 44. 89 -1. 24 7. 54 2. 05 -14. 15 16. 05 18. 80 20. 86 20. 74 90. 00 80. 00 Dividend rate (sum of interim and final) 140. 00 140. 00 Market Ratios P/E P/B 16. 61 3. 19 9. 54 1. 63 80. 00 900. 00 850. 00 150. 00 120. 00 9. 25 1. 32 3. 46 7. 63 9. 27 5. 62 13. 66 6. 21 18. 41 5. 02 10. 35 10. 39 3. 08 0. 99 Source: Prowess Database. Exhibit XIV Common size Income statement Commonsize Income Statement 2003 Total Revenue Sales Other income Change in stocks Non-recurring income Bajaj Auto 2002 2001 Hero Honda 2003 2002 2001 2003 TVS 2002 2001 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 100. 00 94. 22 3. 51 0. 64 1. 64 92. 27 4. 22 -0. 67 4. 18 91. 85 6. 18 0. 36 1. 61 97. 76 0. 44 0. 40 1. 40 98. 24 1. 04 -0. 13 0. 85 98. 75 0. 33 0. 56 0. 35 97. 76 0. 67 1. 25 0. 31 98. 96 0. 89 0. 15 0. 01 98. 04 1. 05 0. 90 0. 01 122 Financial Management at Bajaj AutoCommonsize Income Statement 2003 Exp enditure Raw materials, stores, etc. Wages & salaries Energy (power & fuel) Indirect taxes (excise, etc. ) Advertising & marketing expenses Distribution expenses Others Non-recurring expenses Profits / losses PBDIT Financial charges (incl. lease rent) PBDT Depreciation PBT Tax provision PAT Bajaj Auto 2002 2001 Hero Honda 2003 2002 2001 2003 TVS 2002 2001 52. 84 4. 66 1. 19 11. 73 51. 39 5. 12 1. 41 11. 80 52. 79 6. 20 1. 80 14. 57 67. 59 3. 86 0. 49 0. 19 68. 80 3. 71 0. 56 0. 12 72. 87 3. 67 0. 73 0. 19 60. 37 3. 27 0. 66 13. 69 63. 29 3. 37 0. 69 13. 86 73. 20 3. 46 0. 90 1. 72 8. 61 0. 86 3. 50 1. 63 19. 3 8. 62 0. 82 5. 28 0. 69 19. 06 9. 83 0. 90 4. 93 2. 85 10. 77 4. 16 1. 89 4. 57 0. 07 18. 51 2. 99 1. 88 5. 55 0. 22 17. 10 2. 74 1. 81 4. 12 0. 46 14. 18 11. 06 2. 08 3. 92 0. 10 9. 23 8. 37 2. 12 4. 65 0. 04 6. 69 8. 76 1. 60 4. 69 0. 04 7. 99 0. 02 19. 01 3. 34 15. 67 5. 24 10. 43 0. 07 18. 99 3. 47 15. 52 4. 06 11. 46 0. 19 10. 58 3. 57 7. 01 0. 68 6. 33 0. 48 18. 04 1. 11 16. 93 5. 81 11. 12 0. 72 16. 38 1. 12 15. 26 5. 08 10. 17 1. 09 13. 09 1. 38 11. 72 4. 04 7. 67 0. 35 8. 88 2. 51 6. 36 2. 30 4. 06 0. 80 5. 89 2. 20 3. 69 1. 28 2. 41 1. 24 6. 75 2. 35 4. 40 1. 03 3. 37 Source: Prowess Database. 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Exhibit XVI Comparative Income Statement Comparative Income Statement 2001 Total Revenue Sales Other income Change in stocks Non-recurring income 3628. 74 4172. 1 4829. 37 3177. 2 4471. 87 5107. 7 1820. 98 2213. 59 3111. 28 244. 19 190. 61 179. 85 14. 13 -30. 4 32. 58 83. 93 10. 63 18. 17 11. 42 47. 21 -5. 81 38. 54 23. 24 21. 08 72. 8 19. 57 16. 65 0. 27 19. 8 3. 27 0. 23 21. 4 39. 82 9. 94 Bajaj Auto 2002 2003 Hero Honda 2001 2002 2003 2001 TVS 2002 2003 63. 66 189. 21 125 Financial Insights Comparative Income Statement 2001 Expenditure Raw materials, stores, etc. Wages & salaries Energy (power & fuel) Indirect taxes (excise, etc. ) Bajaj Auto 2002 2003 Hero Honda 2001 2002 2003 2001 TVS 2002 2003 2085. 47 2323. 71 2708. 23 2344. 39 3131. 72 3531. 81 1359. 65 1415. 78 1921. 32 245. 14 231. 48 239. 05 117. 96 168. 94 201. 63 64. 26 75. 37 104. 05 71. 03 63. 64 61. 12 23. 4 5. 98 25. 61 5. 39 25. 82 9. 75 16. 63 15. 44 20. 85 575. 8 533. 48 601. 22 31. 88 309. 94 435. 77Advertising & marketing expenses 204. 94 200. 41 233. 29 Distribution expenses Others 35. 46 37. 02 44. 23 64. 17 58. 1 93. 73 147. 01 119. 04 118. 49 212. 49 85. 39 98. 92 29. 64 47. 36 66. 27 194. 82 238. 63 179. 61 132. 45 252. 48 238. 84 31. 25 83. 7 14. 65 10. 24 3. 86 87. 15 103. 91 124. 72 0. 83 0. 86 3. 28 Non-recurring expenses 112. 59 Profits / losses PBDIT Financial charges (incl. lease rent) PBDT Depreciation PBT Tax provision PAT ppropriation of profits Dividends Retained earnings 425. 47 861. 9 975. 28 456. 32 778. 31 967. 36 148. 39 149. 74 293. 69 7. 4 3. 38 1. 12 35. 1 44. 27 32. 92 51. 01 24. 82 57. 98 303. 8 22. 97 43. 73 81. 69 19. 12 62. 7 17. 96 49. 22 28. 61 11. 24 79. 91 73. 19 418. 07 858. 52 974. 16 421. 22 745. 39 942. 54 125. 42 131. 78 282. 45 141. 12 156. 68 171. 16 276. 95 701. 84 803 376. 95 694. 38 884. 56 82. 56 202. 54 53. 95 129. 35 27 183. 68 268. 36 130. 08 231. 45 249. 95 518. 16 534. 64 246. 87 462. 93 580. 76 89. 21 141. 66 159. 81 160. 74 66. 01 349. 67 405. 49 20. 36 42. 21 22. 91 31. 04 29. 79 99. 56 376. 5 374. 83 180. 86 113. 26 175. 27 Source: Prowess Database. Exhibit XVII Comparative Balance Sheet Comparative Balance Sheet (Rs Crore) Assets Gross fixed assets 2001 Bajaj 2002 2003 Hero Honda 2001 633. 61 2002 714. 21 2003 779. 25 TVS Motor 2001 641. 3 2002 683. 85 2003 834. 7 2490. 26 2540. 08 2626. 18 126 Financial Management at Bajaj Auto Comparative Balance Sheet (Rs Crore) Land & building Plant & machinery Other fixed assets Capital WIP Less: cumulative depreciation Net fixed assets Investments In group / associate cos. In mutual funds Other investments Inventories Raw materials Stores and spares Finished goods Semi-finished goods Receivables Sundry debtors Accrued income Advances / loans to Group / associate cos. Advances / loans to Other cos. Deposits with govt. / agencies Advance payment of tax Other receivables Cash & bank balance Deferred tax assets Intangible assets (goodwill, etc. Deferred revenue expenditure not written off 245. 85 Bajaj 251. 53 Hero Honda 253. 42 Mar-00 May-00 May-00 503. 59 19. 45 18. 95 179. 76 453. 85 302. 59 3. 46 299. 13 0 198. 54 122. 79 26. 81 36. 47 12. 47 135. 54 42. 29 0 560. 54 21. 89 9. 69 223. 47 490. 74 617. 32 26. 37 9. 19 273. 01 506. 24 TVS Motor 86. 24 493. 09 36. 49 25. 21 204. 92 436. 11 14. 89 13. 92 0 0. 97 152. 03 45. 53 17. 65 70. 2 18. 65 210. 64 106. 95 0. 04 88. 03 547. 47 36. 66 11. 69 244. 54 439. 31 14. 39 13. 92 0 0. 47 148. 79 36. 76 21. 73 73. 23 17. 07 187. 09 86. 52 0 136. 47 627. 07 42. 97 28. 19 302. 03 532. 67 87. 92 60. 08 27. 58 0. 26 214. 07 41. 71 44. 32 111. 1 16. 94 149. 87 52. 21 0 088. 17 2139. 11 2214. 16 133. 81 22. 43 1127. 91 145. 48 3. 96 154. 59 4. 01 1171. 8 1327. 95 1362. 35 1368. 28 1298. 23 1201. 65 1991. 42 2777. 68 67. 62 122. 77 257. 02 123. 99 260. 88 220. 77 726. 29 1193. 52 3. 46 3. 46 722. 83 1190. 06 0 178. 36 108. 27 26. 96 34. 02 9. 11 238. 52 99. 72 0 0 200. 92 111. 67 25. 04 54. 84 9. 37 251. 26 141. 49 0 1011. 26 1610. 41 2296. 03 253. 43 91 42. 17 103. 49 16. 77 179. 1 54. 32 30. 57 77. 95 16. 26 207. 98 56. 16 21. 15 114. 63 16. 04 1786. 88 1785. 53 1917. 13 120. 72 33. 01 198. 17 25. 34 167. 04 20. 24 5. 3 380. 88 19. 24 192. 75 86. 6 21. 73 106 73. 11 3. 87 1387. 8 159. 07 30. 03 68. 06 10. 68 0 1. 26 10. 14 81. 85 45. 09 0 0 0 0 0. 21 10. 34 128. 25 108. 96 0. 81 0 0 0 0. 32 11. 31 98. 14 24. 33 0. 89 0 0 15. 43 32. 66 6. 38 49. 18 15. 91 0 0 0 39 0. 14 5. 16 56. 27 74. 27 3. 57 0 0 15. 3 0. 86 0. 03 81. 47 82. 46 5. 9 0 1007. 75 1137. 62 219. 98 21. 32 0 0 123. 32 25. 2 45. 48 12. 8 16. 03 0 0 20. 2 10. 22 11. 52 0. 44 0. 3 0 127 Financial Insights Comparative Balance Sheet (Rs Crore) Share issue expenses not written off VRS expenses not written off Other misc. expenses not written off Total assets Net worth Authorized capital Issued equity capital Paid-up equity capital Bonus equity capital Buy back amount Buy back shares (nos. Reserves & surplus Free reserves Specific reserv es Borrowings Bank borrowings Short term bank borrowings Long term bank borrowings Govt. / sales tax deferral borrowings Debentures / bonds Fixed deposits Other borrowings Secured borrowings Unsecured borrowings Bajaj Hero Honda TVS Motor 0 0 0 0 0 0 0 0 0 0 0 0 0. 44 0 0. 3 0 0 0 16. 03 0 0 20. 2 10. 22 11. 52 0 830. 02 357. 41 25 23. 1 23. 1 0 0 0 334. 31 291. 81 42. 5 233. 95 107. 37 76. 12 31. 25 0 0 4641. 66 5407. 81 6309. 79 1155. 81 2636. 53 2865. 79 3240. 61 150 101. 18 101. 18 114. 17 18. 21 1820730 4 2535. 35 150 101. 19 101. 19 114. 17 0 0 150 101. 19 101. 19 114. 17 0 0 629. 19 50 39. 94 39. 94 23. 96 0 0 589. 25 589. 25 0 66. 48 0 0 0 1753. 9 2188. 68 685. 76 50 39. 94 39. 94 23. 96 0 0 645. 82 645. 2 0 116. 44 0 0 0 861. 03 50 39. 94 39. 94 23. 96 0 0 821. 09 821. 09 0 134. 28 0 0 0 867. 72 1072. 89 323. 39 25 23. 1 23. 1 0 0 0 300. 29 270. 59 29. 7 166. 94 53. 64 34. 89 18. 75 422. 95 25 23. 1 23. 1 0 0 0 399. 85 380. 05 19. 8 121. 89 16. 13 16. 13 0 2764. 6 3139. 42 2515. 39 2744. 64 3121. 21 19. 96 513. 71 55. 97 55. 97 0 19. 96 626. 09 31. 83 31. 83 0 18. 21 840. 23 53. 91 53. 91 0 451. 64 0 6. 1 0 55. 97 457. 74 588. 96 0 5. 3 0 31. 83 594. 26 781. 9 0 4. 42 0 53. 91 786. 32 66. 48 0 0 0 0 66. 48 116. 44 0 0 0 0 116. 44 134. 28 0 0 0 0 134. 28 0 85 0 41. 58 158. 49 75. 46 0 59. 4 0 53. 9 91. 11 75. 83 0 39. 6 0 66. 16 41. 03 80. 86 128Financial Management at Bajaj Auto Comparative Balance Sheet (Rs Crore) Current portion of long term debt Total foreign currency borrowings Deferred tax liabilities Current liabilities & provisions Current liabilities Sundry creditors Interest accrued / due Other current liabilities Share application money Provisions Tax provision Dividend provision Dividend tax provision Other provisions Total liabilities Bajaj Hero Honda TVS Motor 0 0 0 0 0 0 65. 38 36 11. 48 0 0 0 236. 05 0 240. 47 0 0 0 0 71. 47 77. 16 0 0 0 79. 35 0 88. 72 1491. 42 1679. 88 1988. 48 467. 55 357. 29 0. 11 110. 15 454. 93 411. 13 0. 1 43. 7 454. 9 413. 86 0. 08 40. 96 460. 14 365. 62 254. 61 0 111. 01 880. 3 1116. 21 613. 32 398. 61 0 214. 71 681. 52 409. 94 0 271. 58 238. 66 212. 1 211. 71 0 0. 39 298. 04 289. 05 287 0 2. 05 439. 33 406. 26 405. 65 0 0. 61 0 0 0 0. 02 94. 52 9. 51 59. 9 6. 11 19 0. 02 266. 91 8. 34 239. 64 0 18. 93 0 434. 69 10. 9 359. 44 46. 05 18. 3 0 26. 56 0 18. 48 1. 88 6. 2 830. 02 0 8. 99 0 0 0 8. 99 0 33. 07 0 16. 17 2. 07 14. 83 1023. 87 1224. 95 1533. 58 917. 58 1057. 94 1325. 98 80. 95 8. 26 17. 08 141. 66 0 25. 35 141. 66 18. 15 47. 79 4641. 66 5407. 81 6309. 79 1155. 81 1753. 9 2188. 68 867. 72 1072. 89 Source: Prowess Database. 129 Financial Insights Bibliography 1. 2. ?The BT 500,? Business Today, 7th September 1998.Gita Piramal, Sumantra Goshal and Sudeep Budhiraja, ? Transformation of Bajaj Auto Ltd,? Lessons in Excellence Case Contest, www. thesmartmanager. com, February-March, 2003. M. Anand, ? Is Munjal Being Too Generous Businessworld, 19th May 2003. B19th May Chetan Soni & Nandin i Sen Gupta, ? Rolling stock: Payouts put auto investors in top gear,? Times News Network, 4th June 2003. Motilal Oswal, Equity Research, February 2003. Honda Annual Report 2003. Bajaj Auto Limited Annual Report 2003. CMIE – Prowess Database. CMIE – Industry Analysis Service. www. bajajauto. com. www. siamindia. com. www. indiainfoline. com. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 130

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Ecology paper - Essay Example The focus of study in the article was to understand how invasive species, pathogens and disease vector affect human health and determine appropriate measures to reduce disease emergence. The study depicts that invasive species and infectious diseases have become prevalent and widespread because of the increased connectivity in human population. The connectivity in the current world has attributed to the disease outbreak. The new developed trade routes in the previously disconnected countries increase human interactions. Crowl et al., (2008) demonstrated that the enhanced transport systems such as airplanes have increased spread of pathogens. The invasive species has become the second contributing aspect to extinction and endangerment of species in the United States after the increased human population and related activities. The United States government spends almost 120 billion dollars to cater for the non-native species in the country (Crowl et al., 2008). The evidence used to support contrasting point of view was the explanation of the spread of the avian-dispersed H5N1 avian influenza disease worldwide. In-depth and integrated network of research platform was es sential in full understanding of the spread and impacts of the invasion species. The point of view that I most agreed with was the fact that modern technology such as airplanes contributes to the increasing spread of pathogens and invasive species. Most disease in the world emerges from a single area and spread to the entire world. The point became convincing because of the evidence given involving the spread of avian-dispersed H5N1 avian influenza disease. Other points of view in the article such as cause of non-native species extinction became less convincing because of lack of material evidence. Crowl, T. A., Crist T.O, Parmenter, R. R., Belovsky, G., & Lugo, A. E. (2008). The spread of invasive species and infectious disease as drivers of ecosystem change.

Government Contracting Company Assignment Example | Topics and Well Written Essays - 500 words - 2

Government Contracting Company - Assignment Example There are very many methods that can be used in cost estimation, such method may be relevant depending on the projects. Some methods may favors given projects while others may not be encouraged to be used in particular projects. The best cost estimating method may also depend on the available data or any resources such as the financial resource. The methods are: Scatter graph is method of estimating fixed and variable costs. It provides a visual picture of the total costs at different activity levels. Its demerit is that hard to visualize the cost equation line through the data points, especially when the data is differs. It also requires multiple data points and requires five It’s a statistical method used to calculate both the fixed and variable data. Its advantages are it is very accurate. The disadvantage is that it requires a lot of calculation which may be very tiresome. It uses the highest and lowest activity levels of a data to estimate the portion of a mixed cost that is variable and the portion that is fixed. It disadvantage is that it may be misleading if the activity levels are not representative of the normal activity. For example when there are many outliers. The advantage is that it is very easy and do not require a lot of calculations. Various costs estimating method requires various resource, Government as a bigger organization is in a position to require enough resources. For example Government may easily require finance and the required data. The Government contract requires a lot of accountability due to the public interest therefore the best and accurate cost estimation method need to be considered.

Those the year 1968 has benefits us Essay Example | Topics and Well Written Essays - 750 words

Those the year 1968 has benefits us - Essay Example Martin Luther King and presidential candidate Robert Kennedy had their lives extinguished through the barrel of a gun. For many Americans then, the year 1968 came to signify the end of innocence and the dawn of a new era of dashed hopes and unfulfilled promises (Sibley 2009; Hobsbawm 244-270). Events on the international stage further added to this perspective as the Cold War started to heat up and the ramifications of the capitalist-communist split were coming to the fore. It is important to remember that this was the height of the Cold War and as Czechoslovakia sought increased liberalization as a member of the Soviet block, the USSR and Warsaw Pact’s military might crushed any appearances of dissent emanating from Prague and its environs. On August 20, 1968, Warsaw Pact forces invaded Czechoslovakia culminating in the largest internal Eastern offensive since the dawn of the Iron Curtain leading to the forced occupation of this fraternal communist country. Troops from Bulgaria, East Germany, Poland, Hungary and the USSR were coordinated in the effort to crush the spring liberation emanating from Czechoslovakia. Accordingly, more than 500,000 troops effectively occupied this country in what became known as a devastating moment in world history. For Americans and o ther Westerners, the occupation of Czechoslovakia during the height of the Cold War confirmed fears of the authoritarian nature of communism and brought home the importance of maintain a staunch anti-communist foreign policy during this period. The war in Vietnam was another reminder of the precarious situation which existed between the capitalist and communist world and the Vietcong launched the Tet Offensive during this period. With the successful Vietcong attack on the US Embassy in Vietnam, the Tet Offensive effectively ratcheted up the battle for supremacy in Vietnam between North and South Vietnamese forces as well

Research-based Analysis Essay Example | Topics and Well Written Essays - 1500 words

Research-based Analysis - Essay Example As viewers strive to be recognized alongside film characters considered as heroes, so do violence and aggression creep in from the psychological influence caused by such scenes. Consequently, the photo about Kony Make Him Famous 2012 elicits both violent and affectionate feelings from viewers of such photo or the real; film represented by the photo. Elicited feelings are much deeper in those who understand the main character, Kony. The photo conveys strong messages visually; this is further enhanced by the actual meaning of used words, the perceived meaning, the color and shadows, and the entire idea behind the photo. Bower (1-3) explains the use of symbolism in films, and the effects that such symbolism has to the viewer. For example, Bower (2) narrates the scenes in the movie, The Hours, where Woolf has some servants preparing food for her, and after doing all the cooking, she rejects the food to continue with her writing. In this case, Bower argues regarding the powerful messages passed to the viewer in such a case. One of the messages maybe that Woolf was too dedicated in her work and could not sacrifice the slightest moment to eat, or she was indeed detached from her workers that their food evoked no appetite in her. Similarly, in the photo regarding Kony, the same symbolic sentiments may be construed. For example, the photo portrays a dark, red background, and a feature that looks like a cave is visible at the background. The combination of words and the background color evokes perception of blood in viewers; blood is dark red after pouring out of the body. Blood and Kony are suggestive of violence as the history of Kony is told of his fighting with the government in a guerrilla war. Cohen (4) defines the monster and explains the body of the monster incorporates fear, anxiety, and fantasy, all which offer the monster the life they require, and an uncanny independence. Moreover, the monster is not an obvious creature as it in most cases hides, but only to resurfaces to cause havoc among the people. People are intimidated and averse with great fear. The monster does not die immediately as it incorporates a corporal and incorporeal body. This signifies its threat just shifts, but the creature never dies; it will be back again to cause more terror (Cohen, 5).The same characters can be deduced from photo about Kony. First, a monster evokes fear just as the name Kony evokes sentiments of fear in his home country. AS the photo portrays, the dark red color is the blood that Kony signifies, meaning similar to vipers or monsters, he is dangerous, hiding, and will only resurface again to spread terror and then hide again. This may be construed from the cave like features at the background of the picture. Just as the name monster itself without seeing the actual creature evokes fear, terror, and beastly acts (Cohen x-xii), so does the name Kony alone without seeing his picture evoke fear to the people affected. Kony and the beast described by K ohen have similar meanings to the viewer of such photo; they both spread terror and cause much fear in their subjects. Harold in his book, A Moral Never-Never Land explains that violence in media can stimulate views through both sympathetic and repulsive elements contained in such films (243). Moreover, Sobchack explains that increasing violence

The Social Internet Essay Example | Topics and Well Written Essays - 1750 words

The Social Internet - Essay Example One of the oldest institutions that we have used as a place of social gathering and interaction has been the church. While church membership has fallen slightly in recent years, the Internet has been a revival for religious organizations. Mount Calvary Baptist Church in Greenville SC downloaded 80,000 Internet sermons last year from their site (Hills, 2003). Many of these surfers would probably have never set foot inside a church. According to The Barna Group, by 2010 as many as 50 million Americans will rely on the Internet as their sole religious contact (as cited in Hills, 2003). Though the Internet has the power to move more people toward religion, it is clearly moving them away from the church and away from the social setting that was important for conversation and local news in previous decades. Just as the Internet can deliver religion to the people, it also has the capacity to deliver people to politics. Political contributions, debate, and interaction have soared in recent years. The Internet has made vast quantities of information instantly available for anyone who cares to search for it and has the potential to create a new form of electronic democracy. Yet, with all this information available, it is still incumbent upon the user to seek it out, read it, and digest it. Polat (2005) suggests that we are suffering from information overload and says we "[...] may become dependent on others to evaluate the available information" (p. 438).

Rebellion against romanticism Essay Example for Free

Rebellion against romanticism Essay Realism can be seen as a rebellion against romanticism, which, according to realists, did not depict life accurately and was prone to over-sentimentality. Realists did not believe in the structure and symmetry common in romantic fiction. Realists viewed life as irregular, where individuals were always confronted with ethical dilemmas. The realists also valued the individual, and thus characterization was considered a central aspect of the novel. This also means that realists explored the psychology of a novels characters. The values of realism extended to and influenced Henry James. James also dealt with ethical issues and the complex working of the mind in his fiction, and even became considered the â€Å"father of the psychological novel. † James, however, unlike realists in general, did not write in an attitude of optimism. A theme that James explored deeply is the conflict of America (the New World), which for him represented innocence and optimist, and Europe (the Old World), which for him represented worldliness and decadence. He wrote of Americans visiting or living in Europe, where American and European customs were in conflict. Because he lived back and forth in America and Europe, he was able to observe firsthand the differences between the values and customs of the New World and the Old. James was also interested in spiritual phenomena, which was of much popular interest in his time. This also influenced him into writing ghost stories, such as The Turn of the Screw. James, as a writer, was primarily a realist, and much of his work can be categorized as psychological realism. He was a master of the psychological novel. Like other realists in his time, was interested in writing about â€Å"everyday things† and paid careful attention to detail in his writings. He strove for an accurate depiction of American life, often in the context of Old World, European society.

Root Causes Of Excess Waste Output

Root Causes Of Excess Waste Output In the recent years, it was brought to everyones notice that one in two camels are dying in the desert from consuming plastic bags (Attwood, 2008). Camels being an important part of the culture of the UAE gained significant conservation programs one of which were to reduce plastic bags and eventually ban their usage by the year 2013. Wastes like these are discarded by inhabitants which not only damages the environment, threatens biodiversity, but also causes societal issues. UAE is subjected to a rapid growth in population and an immense development to its environment. These two consistent factors result in generation of excess waste. Throughout the developing phase, UAE has faced the adverse effects of uncontrolled waste dumping. Moreover, the recycling techniques were yet at par, pended with no serious thought. Introduction to a few new waste management practices were laid but they did not seem to be effective due to scarcity of modern techniques (State of the Environment, Abu Dhab i, 2011). To have it recorded for improvement; an official centre for Waste Management activities was opened in different emirates and made responsible for controlling and coordinating waste. Concluding from the report, the UAE has been ranked second in generating massive amount of household waste. The very next items consisted mainly of the construction waste, accounting for dominating the waste mass (Todorova, 2010). The amount of waste per person generated rises with consumption. The waste, however, is not limited to domestic waste but includes the by-products leaving the factories and organizations, as well. The electronic waste (e-waste), medical waste, hazardous waste, demolition and construction waste, marine waste, etc. all are different categories of the general term waste that need to be taken care of. The increase in the UAE population and economic growth has made it more mandatory to overcome the environmental problem with intelligent and safe techniques. Excess of waste disposal in UAE has always been termed as a very groovy task which results in greater effect to the environment. This result in affecting the overall improving living standards of the UAE and international recommendations of the land for quality living. An important thing to note here is that proper disposal of waste is very essential. It is a cycle in which humans use and produce waste; however, the waste is never thrown away but, it finds its way back to the environment and to use via different means such as through the food chain. The reason for choosing this issue is because excess waste generation is a well noted problem around the world. Moreover, it exhibits its importance for sustainable growth and quality living. In addition, it is a growing problem as cities run out of space to dump waste. For instance, Dubai has filled two of its landfill sites and is aiming at zero output of waste by 2030 (Al-Khan, 2012). This issue might make people more aware of the unhygienic activities and would educate them to evaluate the consequences of excessive consumption resulting in waste generation. This discussion is entirely based on socio economic reforms involving strategic development, taking waste management systems into account and their application for reduction. Further more, this discussion could be used to highlight improving methods and gaining responses from the authorities who are responsible for environment protection. Root Causes Of Excess Waste Output It is crucial to understand the root cause of excess waste generation in the UAE. The main causes of excessive waste generation seen in UAE are: increasing the population, increasing the demand and consumption, and advancements of new technology with no proper know-how of disposal. Moreover, from the interview conducted with Mr. John Schneider, who is a contract specialist at The Center of Waste Management, it appears that the leading cause of excess waste generation is the fast developmental stage UAE is in. Abu Dhabi for instance generates the greatest amount of demolition and construction waste in the Abu Dhabi Emirate in relation to Al-Ain and Western Region (The Center of Waste Management Abu Dhabi, 2011). First of all, the population of the UAE has been increasing rapidly since the last few years by the high rate of births and by migration from different countries to the UAE for employment opportunities and high quality of life. The high population increases the consumption of products and materials which in return produces more waste. Second, the materialistic perception and constant attractive advertisements of luxurious life has augmented the demand for many products regardless to whether it is needed for survival. The demand on products makes the producers manufacture more of their products and the increasing rate of expending these products generates more waste. Furthermore, it is not only the utilization of these products that lead to waste generation, but the waste released during the production process, resource acquisition, and unwanted by-products are also leading components of waste in the UAE (Schneider, 2012). Overconsumption is considered a serious problem in UAE that un equivocally makes the production line and imports to intensify and consequently lead to excess generation of waste. Especially the electronic gadgets and quick shift to technology in UAE has lead to more e-waste which is one of the wastes hardest to dispose and get rid of. People in the UAE are discarding gadgets to have latest ones associated with luxurious lifestyle. Lastly, as per the interview with Mr.John Schneider, it appears that Abu Dhabi in particular has a high demolition and construction waste than any other. The reports tell that construction and demolition waste from Abu Dhabi city itself constitutes 85% in the whole Emirates and more than 50 percent in the total daily quantity of waste in the city (The Center of Waste Management Abu Dhabi, 2011). Effects Of Surplus Waste Generation Waste is not just an unpleasant sight but has an awful smell, too; furthermore waste has an adverse effect on our resources if it is not properly dealt with. Not only this, but all kinds of waste can cause health issues in humans, animals, and plants (Ministry of the Environment, 2012). As aforementioned causes show how waste is adding on in our environment, it is important to note the effects it may have on an individual, society and the world if it is not aptly discarded (EDU Green, 2007). 3.1 Individual level: The consequences of excess waste production can affect the human health in two ways: directly or indirectly (Ministry of the Environment, 2012). For instance, toxic gases from the dump areas are likely to pollute the air leading to respiratory issues in inhabitants. UAE has a harsh humid climate that is also favourable for pests, pathogens and, microbial infections. Indirect impacts can be seen when pollutants from wastes in soil decrease the efficiency of soil and influence the feature of crops (Ministry of the Environment, 2012). Moreover, according to what is stated in a news article published in The National, the hazardous waste incineration is endangering human health. The Northern Emirates have been a victim of waste dumping that is not properly managed and is leading to health issues among the residents (Hassan, 2010). 3.2 National level: Excess waste generation day after day leads to additional landfills to be built (Solid waste impacts on human health, 2012). Eventually the city runs out of space to dump waste and exports to other cities (Disposal site , 2012). Dubai, for instance, is running out of space to build more landfills. Two of the already current landfills have been closed as they have exceeded the limit and the other one is expected to last for only seven years time (Al-Khan, 2012). Excess waste output also affects the economy nation-wide. For instance, it was projected in the Green Middle East website that the UAE economy faces a significant loss of about 1.5 billion AED annually as a result of improper recycling (Green Middle East, 2012). 3.3 Global Level It must be comprehended that most waste dumped areas contribute significantly to the green house gases. Methane is one of the most released green house gas from waste sectors contributing to global warming (Waste and Climate Change, 2012). According to a report published by Environment Protection Agency about Global Mitigation of Non-CO2 Greenhouse Gases, 12% of methane emissions world-wide are from the landfills of municipal solid waste. Furthermore, if nothing is done about it, the emissions will increase by 9% between the year 2005 and 2020 (Environment Protection Agency). Considering this, the UAEs waste output, in relation to its size, is extensive. UAE contributes 22% of household waste to the 22.2 million tones of waste from GCC countries which makes it second highest in waste generation next to Saudia Arabia (Todorova, 2010). Efforts Made By UAE Government The UAE has developed extensively in the past decades; however, this development has not come without a price. According to Mr. John Schneider, to face this national crisis, the municipalities of the emirates have been struggling with drafting strategies and policies. Abu Dhabis Center of Waste Management (WMC) has been lucky in numerous ventures to manage excess waste output. The establishment which effectively has been in operation since 2009 has taken many positive steps such as renewing contracts to companies, taking over the waste management of all the companies in the Emirates as well as pest control (Schneider, 2012). Moreover, it follows standard operational procedures and technical guidelines for collecting and managing waste. WMC endorses and accepts waste energy henceforth; efforts to generate waste energy have been taken up. Also contracts with outsourced recycling facilities have been established to recycle items (Schneider, 2012). UAE government initiated several public awareness campaigns to direct their citizens toward better waste management. One of the waste management campaigns highlighted by Mr. Schneider (2012) was the idea brought up by 11 year old Cameron Oliver who won the Abu Dhabi Award for Everyday Heroes. His idea urges UAE citizens towards a more responsible use of plastic to save desert animals generally and camels especially. Other campaigns were the product of collaboration between nongovernmental organizations and the UAEs government, together they educated the public about the benefits of waste management and the three Rs reduce, reuse, and recycle. In addition, WMC provided various recycling waste pins at eyeshot around the country to facilitate the recycling assignment for the individual citizen (Schneider, 2012). Furthermore, stricter policies and proper implementation by employing inspectors and contract administrators on daily basis have allowed WMC to deal with illegal dumping of wast e (Schneider, 2012). In an attempt to create awareness and deal with extra waste output, the Government of Sharjah installed reverse vending machines that takes in plastic bottles and aluminum cans which can be recycled accompanied by recycling awards via loyalty cards or other prizes through online accounts (Sharjah to Launch UAEs First Reverse Vending Machines, 2012) Another initiative was taken up by the hotels in the UAE by practicing a new technique of waste management where different rooms and suites are given bins with different colors, each for a particular type of waste. The recyclable waste and non-recyclable waste are separated before they end up in the main garbage dump; consequentially, less waste ends up in the landfill thereby improving new green techniques for keeping the environment clean (Todorova, 2012). The Emirate of Abu Dhabi has been looking forward to reduce waste that ends up in landfill. Landfills have been filling up at a very rapid pace which needs to be slowed down. For this reason, Abu Dhabi government has launched recyclable material programs (Schneider, 2012). In addition, numerous companies in UAE are required to register with the tariff regime of the Central Waste Management (Abu Dhabi To Divert 90% Of Waste From Landfills, 2011). Moreover, Abu Dhabi is imposing a fee for few industries that generate excess waste which is not properly managed. This would compel organizations to adopt recycling and reusing as one way of managing their waste (Abu Dhabi Imposes Waste Management Fees, 2012). Understanding the drawbacks of dumping waste in landfill, Ajman has decided to take up on a new strategy. The emirate has planned to build an incineration facility to acquire energy from waste (Todorova, 2010). Mr. Schneider also highlighted about the current recyclable facilities present in Abu Dhabi and Dubai that are active in collecting recyclable materials such as plastic, paper agricultural waste, textiles, demolition waste, and steel. In future, WMC aims to develop ways to recycle agricultural waste in order to use it as an animal feed for the livestock (Schneider, 2012). Recommendations: It should be dually noted that waste cleanup is a lot more expensive than waste prevention. Following are some other methods that can be used to resolve this issue: 5.1 Individual Level Every individual makes a difference. If every individual changes his habits and actions, collectively, they can bring a huge change in any sector of the society. Citizens should refrain from littering around and throw the trash in proper trash cans. They should prefer buying recyclable and biodegradable products and dispose of recyclable items in the proper recyclable bins. Spread the word, inform, and educate others about this issue. Re-use as much as possible, including bottles and plastic bags 5.2 National Level Governments should do their level best to provide awareness campaigns and advertisements informing the public of the disastrous consequences of excess waste and garbage (Schneider, 2012). Provide recycle bins all over the region Place taxes and fines on companies that produce extra waste above acceptable rate (Schneider, 2012). In addition to enacting laws to stop public littering (Schneider, 2012). Subsidize organic and biodegradable products. Invest in research to study microbial action on breakdown of waste or using waste to release energy (Schneider, 2012). Provide benefits, rewards, and privileges to those industries that best recycle their excess waste and/ or most efficiently convert the waste into energy. 5.3 Global Level: Well developed countries could initiate projects where industries coming from poorly developed countries can market materials that are secondary at a price paid per tonne. A recycling business venture can not only add to the economic system boosting international relations but also improve the environment, on the whole (Bhada-Tata Hoornweg, 2012). Moreover, UAE can enter a legally binding protocol with the neighboring countries such as Bahrain, Iran, Qatar, etc to regulate what waste enters the Persian Gulf since it shares common borders. Well developed countries can assist developing nations by financing proper management of waste. E-waste that is exported to less developed nations should be minimized and proper ways of disposal need to be looked into when manufacturing the product in the first place. Trading substances that are non-biodegradable and persistent in the environment should be stopped or the custom charges should be increased in order to discourage their supply and demand. VI. Conclusion In summary, from the research conducted and insight of Mr. John Schneider, it is quite obvious that UAE is suffering from excess waste output. It also is highlighted that UAE generates tones of waste that is dumped in landfills, mostly. However, the leaders of the UAE are well acquainted with this devastating cycle of waste generation and have adopted ways to deal with it. Nevertheless, this mission of zero-waste output cannot be achieved nationally unless every citizen makes an effort. With collective decrease in consumption and methods of managing waste such as reusing and recycling, UAE can contribute globally to the world in minimizing hazards of waste output.

Location Determinants of FDI in Transition Regions

Location Determinants of FDI in Transition Regions An essential aspect of globalization in past period has been the progressing grows in foreign direct investment (FDI). According to assessments of UNCTAD (2000) experts estimation, since 1979 to 1999 the volume of the world FDI funds to worlds GDP boosted by 16 per cent and relatively the proportion of world FDI streams increased by 14 per cent. Such a progressive expansion explains as the FDI determinants plays a leading role in development of any countrys economy, in terms of macro and micro parameters (Lipsey, 2001). Most of time FDI is provided with developed countrys strong market orientations to emerging countries, where market is weak. To expose most the effective conditions which are attracts FDI determinants in the host regions, a number of researches have been done. As a result of this study has concluded that there is a large impact on a market size, GNP and economic growth rather than investment incentives. However, the circumstances of FDI are various in each country because all of them have weak and strong markets and therefore have different outcomes of FDI stocks. The transition regions such as CIS and CEE regions have been recently studied comprehensively. There is a large empirical literatures implemented the FDI effects, as an engine machine for the transition regions. Due to advantages that related to the introduction of new technologies and innovations, new managerial techniques, development of additional skills, increased capitals, improvement of working conditions and the development of the industrial sectors in the transition regions (Caves, 1974 and Perez, 1997). Although, several policy makers viewed that FDI activities might provide negative effects on countrys economic development. This diversification followed by foreigners intensity in the host markets. The traditional debate stands for relationship among FDI and the prospects for economic growth. The study is divided into six parts. Chapter two will examine the results of several empirical studies of FDI activities, by examining series of positive and negative effects on the transition regions economies. Chapter three will review the mechanism of FDI activity by exampling its various types. Moreover, this chapter will briefly estimate FDI types affects on transition companies. Chapter four draws economic overview of the Kazakhstans market condition and the intensity of economy growth since the country gained its independence, and furthermore, will illustrate foreign direct investment environment. Chapter five contains FDI challenges and problems in the Kazakhstan oil and gas field industries, and will show government strategies against foreign investors. Finally, the last chapter will conclude with the summary and implications of the study. 2. Literature review Over the past years the endowments of Foreign Direct Investment (FDI) are becoming to be very important issue for transition countries. As the FDI activities contribute certain volume of assistances to the national economic growth. However the issue of FDI activities are often stands to be as the implicit hypothesis, in terms of its flows that transports benefit to the host regions economy. The impact of such disputes generally depends on FDI forms behaviour that it takes. The several evidence of empirical literatures have drawn series of positive and negative features of FDI as a basis of assistance growth for transition regions, some of which are examined below. The article by Kozima ( ) has expressed a macroeconomic explication of the FDI behaviours. Kozimas observation analysed that FDI ought to operate as channel trade for the productivity goods and thereby its direction should be followed by the market forces rather than the micro level characteristics. The FDI flows transfer and promote productivity level growth in terms of technology, management skills and know-how from the developed industries to the developing industries. As the outcome of such investment types follow by the improvement of the welfare conditions and by the increase of the industries income. The case can describe the Japanese FDI activities in Asian regions. On the other hand, in some terms FDI activities correspond to negative effects of its location decisions. This presents the case of the presence of more technology advantaged foreign company in an emerging country, where domestic industry might not be comparatively competitive and efficient to compete with the adv antaged foreign company. Therefore, the presence of more advantaged foreign company under such conditions can simply take over domestic firms market shares and decrease countrys economic welfare growth. The case explains by the United States FDI activities after the second war. De Gregorio (1992) stated that FDI may bring several benefits that persuade economic development by its advanced technologies and skilled knowledges, as such factors may promote productivity growth in emerging regions. De Gregorios studies have estimated several facts on economic growth in Latin America. This followed by increasing investment growth which is approximately implemented 0.6 per cent of GDP growth annually from 1950 to 1985. Likewise, Blomstrom and Lipsey (1992) examined FDIs positive externalities. However, such estimations studied under certain conditions that followed by high performed regions and therefore implemented positive performances. According to their studies, countries that only have attained certain level of returns can benefit from FDI activities. This can be correlated to human capitals that provide different income returns in transition regions. As well educated and skilled labour population can utilize the benefits of advanced technologies to the whole economy. The model of Malign emphasizes the potential interaction among FDI that realized by foreign company under the imperfectly competitive industry and a host region with imperfectly competitive domestic market. Hence the foreign firms operation in such market faces with several barriers to gain access into a market, and thus this increase market concentration instead of decreasing. (Cardoso and Dornbush 1989; Grieco 1986) In this term the presence of foreign company can simply turn down domestic savings and investment capacities by taking out rents and funds activity. Moreover, such case can basically trough out domestic firms from local business activities. The international firms might reinvest their capital flows to related industries in the host region and expand their market powers. The repatriation of such reinvestment profits may take out capital from the host region. Far from providing an encouraging impact on profits distribution and social environment improvements by foreigners might sustain a small power of local business partners and suppliers. As they utilize inappropriate intensive technology that might generate small number of labour forces, whereas consigning employees to the category of the unemployed, and this turns down them to set up more productive occupations. Their rigid control over advanced technology and skilled management channels may put off the favourable spillovers and externalities. It is commonly acknowledged that attracting FDI spillovers promote development effects, as the FDI activities symbolize as an essential source of technological spillovers, and as one of the resourceful and practical tools for improvement and upgrading of transition industries. (Dunning and Narula 2004) In fact, FDI spillovers have been enthusiastically supported under the Washington consensus as a universal remedy that leads economic growth and expansion. Because, structural changes highly amalgamate macroeconomic stabilization strategies along with strategies that increase FDI flows. However, the benefit levels are considerably various and the results from FDI assistances procedure are not always positive. (Lall and Narula 2004) Aitken and Harrison (1999) estimated the spillover effects to domestic companies in Venezuela. They investigated exceptionally limited effects of spillovers level. In addition, this spillover levels were mostly delivered from joint ventures. This suggested that relations among foreign and domestic company produce some amount of spillovers. However, its effects can not capture the whole economy. This can be explained when the foreign company in some way induced productivity growth but its financial sector would not be able to capture the plant stage, although it ought to capture even at the aggregate stage. The effects of political intensity have been examined by several policymakers and suggested that relationship among FDI inflows and host country firstly based on the political stability. Alesina and Perotti (1996) examined the impact of political vulnerabilities on economic development and investment. They implemented that an increase of the political intensity in the host region leads to decrease of investment flows. By implementing index of political instabilities that stands beyond of political assassinations, corruption and coups. Campos and Nugent (2002) analysed the causal linkages among investment and growth index by utilizing pooled panel statistics. According to their investigation results, it suggested that there are not so many evidences for the negative linkages among political instability and GDP growth. However, in terms of investment facilities, there are strong causalities of political vulnerability to investment decline. The relation among political volatility and asset markets has been examined by several policymakers. Robin, Liew and Stevens (1996) have examined factors of political volatility in transition regions. According to their analyses the importance of asset returns stands to be more significant in transition regions than in developing regions. As Bussiere and Mulder (1996) implemented their investigation in the twenty three regions and proposed that political vulnerabilities in economic models broadly explicate economic decline the aptitude of economic model to explicate economic decline of transition region. Moreover, they stated such conditions are vulnerable to economic crises when election consequences under uncertainty. Kutan and Zhou (1995) investigated that political intensity in Poland during 1990s had introduced economic reforms that influenced foreign exchange returns and bid-ask spreads. According to their investigation, these events reflected by political volatility that seriously harmed the national currency value in international exchange market. This consequently boosted the bid-ask spreads under the foreign exchange transactions that formulated bid-ask spreads to be more expensive for foreign investors. Likewise, Melvin and Tan (1996) examined political volatilities on foreign exchange market by their studies that implemented similar causes. Ivo Feierabend and Rosalind Feierabend (1966) formulated their Feieraben measure on political instability. This theory based on the countrys political vulnerabilities that considered the amount and concentration of political aggressiveness behaviour that takes place within a nation. According to their definition on political instability it is: the amount of Aggression directed by individual or  groups within the political system against other groups  or against the complex of officeholders and individuals  and groups associated with them. Or, conversely, it is  the amount of aggression directed by these officeholders  against other individuals, groups, or officeholders within  the polity. Using this characterization Feierabends have examined various indicate scales of political vulnerability that based on the amount and concentration of political actions. Feierabends have segregated thirty categories of political actions that were given by various weights. As the more destabilise actions, then the higher influences it obtains. For example, during the election of public servants is estimated to be zero, as this was not followed by aggressiveness of political intensity. However, in cases of assassination of high politic figures, corruptions and coups had estimated up to 5 and 7 scales. In the case of locational decision of foreign companies the political intensity of host regions might lead them out off their domestic market. Aharoni (1960) and Thunell (1977) showed that the intensity of political instability might be very significant measure in the foreign investment activities in the way of location decision. This has been examined that foreign investors in general consider the political vulnerability of the host regions in an unsystematic way. However, a foreign company that operates abroad should put forward its attention on political intensity. This would facilitate in the formulation of tactic for choosing the location and expand further its investment flows. As in some circumstances the host governments might change their political intensity in terms of nationalization. 3. The role of FDIs The priorities of developing economies are obviously comprise under constant revenue growth for their economies through strengthening technological capabilities, increasing investment rates, and enhancing the competitiveness of their production in the global marketplace. By providing the opportunities to economic growth, creating employment potentialities and conserving the environment for future population. As the globalisation and liberalization of the world economy constrains the developing economies to upgrade abilities and resources of their economies. The modern global can be classified by speedy progress in knowledge and economical capability under competitive circumstances. Therefore, in globalizing world the economic growth can be implemented constantly only if states can promote privileged value-added performances to supply goods and services for their open market strategies. Among these attitudes MNEs and FDI activities can apply for an essential function in complementing their efforts. As their assets is one of the main features of promoting local markets or entire enterprises to the international market. FDI has been characterized differently by several empirical literatures. The International Monetary Fund (IMF) describes FDI as an investment made to acquire a lasting interest in a foreign enterprise with the purpose of having an effective voice in its management (Bjorvatn, 2000). Generally, FDI activities are undertaken by Multinational Enterprises (MNEs) that provide a huge capital of investment flows over the world. These investment flows classified as a market seeking, its purpose to serve for an existing market. For instance, owing to a high tariff rates, the company needs to relocate its activities to the emerging country, as firms activities were previously supplied by exporting. The motivation for such investment in the host economy explains in better serve for a local market through production, market growth and market size. The case of Japanese FDI in vehicle production in the US can be implemented as the market seeking (Duning, 1993). The efficiency seeking appears with a firm that involves in gaining economic scale and scope activities from the host economy. In this perspective, close relations with the western countries would lead to corporate network linkages and the presence of high transport and communication costs will encourage more of efficiency-seeking FDI. Finally, the asset seeking or resource seeking occurs when a firm invest into a foreign country to find natural and low cost labour force resources that not available within their country. It might follow by natural resources, cheap labour forces and furthermore, by raw materials. Again the case of the UN and Japan can present the view of asset seeking by searching for a cheap labour force in Asia. In contrast to market seeking, it is able to serve for a home and for a third countrys market. This tendency follows particularly by industrialised sectors that subsidized by MNEs. Therefore, such accessibilities in physical infrastructure and skilled and cheap labour forces are the main trends of resource seeking. 3.1. FDI types In analysing market entry through FDI flows, there two choices such as, greenfield investment and takeover of an existing company. Through greenfield investments a company which invests a small amount of inputs, and afterwards when demand increases it can enlarge that investment. A greenfield investment frequently sets up from building a new company after the governments of host countries would approve that, because of the location perhaps can be in the profitable place and produce a new production capacity. In discussing another type of FDI is the takeover of an existing business through the acquisitions and mergers (MA). In other words, foreign companies appear in the emerging countries and purchases already existing local business by gaining the packages of the company, as a result, such companies turn out to be an affiliated. In the past years MA have seen massive surge by reaching more than 50 per cent (Theodore 1998). Admittedly, there are several trends that foreign firms seek to invest their capitals abroad. These features were partly analysed by Dunnings OLI theory. As Dunning (1993) describes three conditions that firms carry to take FDI activities. Ownership advantages- appears, when the foreign firm is capable to compete with the domestic firm. It can be attained through specific skills or assets that follow by advanced management and technological capabilities. Companies that endowed with ownership advantages basically enlarge their operations in a foreign country to internalize the growing benefits from ownership advantages. Location advantages- aspects as natural and mineral resources, transport costs and low prices, access to the domestic market determine the presence of the investment. Moreover, factors such as social and political stability and business environment that follows by stable prices and sustainable budget deficit determines location. Internalization advantages- occurs, when the foreign firm is able to retain its multiple activities, rather than licensing or franchising technology to local firms. The case can be implemented, when the firm prevents the technology or assets imitation by rival firms. According to OLI theory, all these criterions should be fulfilled for firms to invest in the host economies. In terms of investment incentives, Dunning (1993) pointed that OLI theory is generally stands for a characteristic of the host country and for the MNEs. This follows by attracted or specific location, skilled or cheap labour forces, infrastructure and political stability. Undoubtedly, these trends are very significant for the location of FDI assets, however, the significance of investment incentives have raised in the past years. Over the world countries have lowered their entry barriers to persuade a massive amount of foreign subsidizes and generated FDI incentives to attract more foreign investment flows. Therefore, operations such as low taxes, attractive tariff regimes, and market preferences, investment in infrastructure, financial grants and loans for the foreign firms took the form of investment incentives. Basically, FDI incentives are similar in developed and developing regions. Regarding to UNSTAD (2001), a small number of regions participate for FDI activities without subs idies nowadays. This report estimates that 95 per cent of adjustments in FDI legislations for the 1990s were encouraging to foreign companies and furthermore, these adjustments followed by FDI promotions and incentives. The motivation of such reasons primarily tended by prospect of seeing positive spillovers inflows into host economies UNSTAD (2001). In the context of positive spillovers host governments tries to attract foreign subsidizes to their economies as they considers that FDIs spillovers generate positive externalities to the domestic companies by transferring know-how and advanced technology. The following terms can be implemented Domestic companies might benefit from foreign production processes as they diffuse new technologies. It can be implemented through labour turnover and through imitation. As the foreign firms gain access into domestic market equilibrium, it is makes domestic companies to be more an incentive to protect market shares income (Ponomareva, 2000). These systematic alterations might cause various sorts of spillovers that bring to productivity growth into domestic companies, as the spillovers effects from foreign companies can be significant. On the other hand, several literatures provided that spillovers effects can have negative forms. In article by Aitken and Harrison (1999) the negative impacts of spillovers introduced on the domestic firms productivity, in terms of market steeling effect. For example, when the foreign company gain access to the foreign market and take over local market shares by its technology advantages. In other words, the MNEs advantages can simply trough out domestic firms productivities and so, local companys productivity declines. 3.2. Spillover activities and types. There is a large empirical study that implements the significance of spillover activities in the host economies. According to Blomstrom and Kokko (1997), the importance of the FDI spillovers is not only the investment in a new plant and equipment, but also transfers of technology, skills and capital for the host countries. Consequently, FDI arrives through managerial and financial resources, technical support and strategic assets. This can be companys brand name that takes place by comparative advantage to domestic entrepreneurs. Spillover activities can be taken during foreign companies presence that provides efficiency and productivity to the domestic firms. The positive spillovers followed by foreign investment enterprises that provide benefits to domestic companies, in terms of productivity technologies that do not exhaust cost for gains (UN-ECE, 2001). In the perspective of the FDI spillovers, several policymakers have concerned that the presence of foreign firms lead to productivity growth of domestic companies. Whereas, other authors implemented that, there is also a negative impact of FDI spillovers. One of the common explanations of FDI in transition regions is assistance in restructuring domestic firms. As Wallner (1998) suggest that, partly an emerging firm occurs under the soft budget constraint and thereby FDIs activity might provide in a positive way. As the presence of the foreign firms provide various incentives to reduce funds to domestic companies and as a result involves in companies restructuring. Another positive feature of FDI spillovers importance is transfer of technology and know-how to domestic firms. On the other hand, this can also provide negative spillovers. For instance, in terms of product market under imperfect competition, that can follow by a considerable decrease of the market shares of the local firm s and moreover, can trough out domestic firms from the market. The literature by De Gregorio and Lee (1998) and Kokko and Borensztien (1994) stated that FDI spillovers can generate in positive way, if only the technology development among foreign and domestic company is not so great. The trends of positive spillovers were found in the next literatures Blomstrom, Sjoholm (1999) in Indonesia, Caves (1974) in Australia and Globerman (1979) in Canada. In the case of negative spillovers the following studies such as Kornings (1999) in Poland and Romania and Aitken and Harrison (1999) in Venezuela have implemented such effects Spillover activities determine two approaches such as direct and indirect approach. The direct approach examines through statistical examples, as the spillover activities are directly correlated to presence of foreign firms (Blomstrom et.al.1999). The purpose of the direct approach frequently leads to productivity measure of local firms to the MNEs presences. There is on common method that utilizes evaluation of production functions that estimates through the foreign firms presences upon industry productivities and on its levels. In studies of econometric the spillover activities might expose the total impact of productivity to host firms under the foreign presence. However, the impacts are frequently not specific nor implement its effects (Blomstrom and Kokko 2003). The indirect approach examines through channels in which FDI spillovers may take in, and afterwards estimate the forcefulness of those channels. Likewise direct approach, there is a large studies on its channels, but it can be difficult to implement general conclusion from these studies (Blomstrom et.al.1999). Another spillover activity in the host industries persuaded by two types such as inter (vertical) and intra (horizontal) industry spillovers. The vertical spillovers appear when foreign company provide impacts to the domestic suppliers. This can be under different industries that engaged in a long term contract among foreign company and a domestic supplier (Smarzynka, 2002). The horizontal spillovers result from the occurrence of the MNEs that brings competition to the host economy. There are five channels that chase horizontal spillover activities such as competition, transfer of technology and RD, industrial management, demonstration and imitation activities and human capital and labour turnover (Blomstrom et. at. 1999). According to UNECE report (2001), on intra industry spillovers in transition regions have estimated FDIs horizontal and vertical impacts. The following (Table 2) estimated that basically the presences of foreign companies did not perform better and thus, they have not generated the expected positive spillovers to local companies. Virtually, the FDI spillovers turned to be negative in these manufacturing regions. Generally, CEE regions were under negative coefficient performances. The exception was followed with Estonias and Russias manufactures which are presented positive coefficients. The results suggested that it is not unexpected as the initial conditions and economic environment was critical during the transition period. Those countries essentially had experienced various shocks and thus, local companies were not capable to react to the challenges that followed by FDI. This however, can be temporary factors and these regions will be more competitive with the next FDI flows. 3.3. FDI flows in transition economies. Over the decade ago the former Soviet Countries and central and eastern Europe regions have been transferred themselves from centrally planned system to open market economy. This systemic transformation has seen a massive upsurge in FDI inflows that afterwards assisted to recovery their internal economic vulnerabilities. As the initial stages of economy conditions experienced several economic shocks and therefore domestic growth of these regions went down. According to UNECE report (2001) the industrial productivity decreased by 34 per cent over the transition regions. Furthermore, in some regions it even followed by 64 per cent. This economic collapse was stated by macroeconomic imbalances, monetary overhangs, and by external debts. Consequently, these host regions were under extremely necessitate of liberalization, privatization and stabilization reforms that followed with the foreign subsidizes. There are strong evidences that FDI tends to boost the initial stage of economic perfo rmances. The following trends were considered such as, FDI frequently helps to the host country to amalgamate into the global economy. FDI increases the aggregate rate of investment. FDI generates transformation of hard technology that process technology and product. FDI engenders relocation of soft technology that processes organization, management and sourcing technologies FDI tends to encourage networking and subcontracting patterns that conducive for host firms to improve their technologies and productivities. (Dyker 1999) Thus, the importance of FDI in these regions was not only in supplying funds for the acquisition of new equipment, but also it seen transformation of advanced technology and organisational forms that led from more developed economies. Attracting FDI assets are considerable issue for the transition regions, as it leads to catch up policy with more developed economies by improving their economic efficiency. According to Transition Report (EBRD 2007), in the past decade the former soviet regions and central and eastern European countries have been successfully stabilized their economic circumstances. As their living standards have improved and moreover political, social, economic and legal issues were adopted and improved by state agencies. The transformation processes however implemented in different stage as their initial conditions were varied over all regions. Some of regions have simply been mistreated by foreign investors as the investment inflows directed more toward to some regi ons. (EBRD, 1999, Henriot, 2003) This discrepancy might be implemented by the high economic dynamism of more advanced transition economies. There are some regions that have been under the greater concern to investors due to of their mineral wealth resources, and close frontiers to the European Union countries. Moreover, in the last 10 years, it was obvious that foreign investors were in favour to a more stable political economy and to a favourable environment that had followed a consistent privatization policy (Henriot, 2003). According to table the following four regions experienced a large amount of FDI flows. It is clearly seen that Hungarys state was dominant in foreign investment flows. Its economic condition was greater then in other regions and furthermore political relations with the western countries brought attention of foreigners. As the view of Hungary implemented beneficial infrastructure and economical ability to adopt foreign subsidizes. In addition, in its early sophisticated privatization strategy on state owned firms made favourable environment for foreign investors. Likewise FDI flows in Poland and Czech Republic also had experienced a fast growth. This rapid increase was experienced through acquisition of state owned enterprises that had involved foreign investors. The Slovaks FDI inflows entered later in contrast to Hungary, Poland and Czech Republic and therefore had the lowest rate. Although, in most cases its small sized enterprises were privatized by foreign investors. Through the government policy that could proceed with the well managed economic reforms and externa l relations with the neighbouring regions. The total stock of FDI inflows for country size by population and GDP analysed that Hungary and the Czech Republic have succeeded significantly then Poland and Slovak Republic. Nevertheless, these regions tended to recover faster in contrast to the CIS regions. In the perspective of CIS regions, FDI stocks remain with low attitudes, despite their performance in accomplishing macroeconomic policy and managing relatively high growth rate. (Table 2.1.) illustrates that regions such as Kazakhstan and Azerbaijan have chased the largest proportion of FDI stocks, whereas Tajikistan demonstrated the lowest amount of FDI stocks. Similarly, shares of FDI stocks in GDP for Azerbaijan and Kazakhstan have performed better. In terms of per capita of FDI stocks, regions as Kyrgyzstan and Azerbaijan have performed worthily, whereas Uzbekistan and Azerbaijan turned with the lowest rate. In comparing the result of FDI stock levels of Central European to Central Asian regions, the Republic of Kazakhstan, Azerbaijan and Russia were shown with the better perform attitudes. This impact followed with large inflows of FDI stocks in oil and gas fields. Nevertheless, these regions levels of FDI stocks are still smaller then in other central European regions. The case of such underperformance of the some CIS regions can be attributed by the tardiness in privatization, incapability and disinclination in reform strategies and inefficienc Location Determinants of FDI in Transition Regions Location Determinants of FDI in Transition Regions An essential aspect of globalization in past period has been the progressing grows in foreign direct investment (FDI). According to assessments of UNCTAD (2000) experts estimation, since 1979 to 1999 the volume of the world FDI funds to worlds GDP boosted by 16 per cent and relatively the proportion of world FDI streams increased by 14 per cent. Such a progressive expansion explains as the FDI determinants plays a leading role in development of any countrys economy, in terms of macro and micro parameters (Lipsey, 2001). Most of time FDI is provided with developed countrys strong market orientations to emerging countries, where market is weak. To expose most the effective conditions which are attracts FDI determinants in the host regions, a number of researches have been done. As a result of this study has concluded that there is a large impact on a market size, GNP and economic growth rather than investment incentives. However, the circumstances of FDI are various in each country because all of them have weak and strong markets and therefore have different outcomes of FDI stocks. The transition regions such as CIS and CEE regions have been recently studied comprehensively. There is a large empirical literatures implemented the FDI effects, as an engine machine for the transition regions. Due to advantages that related to the introduction of new technologies and innovations, new managerial techniques, development of additional skills, increased capitals, improvement of working conditions and the development of the industrial sectors in the transition regions (Caves, 1974 and Perez, 1997). Although, several policy makers viewed that FDI activities might provide negative effects on countrys economic development. This diversification followed by foreigners intensity in the host markets. The traditional debate stands for relationship among FDI and the prospects for economic growth. The study is divided into six parts. Chapter two will examine the results of several empirical studies of FDI activities, by examining series of positive and negative effects on the transition regions economies. Chapter three will review the mechanism of FDI activity by exampling its various types. Moreover, this chapter will briefly estimate FDI types affects on transition companies. Chapter four draws economic overview of the Kazakhstans market condition and the intensity of economy growth since the country gained its independence, and furthermore, will illustrate foreign direct investment environment. Chapter five contains FDI challenges and problems in the Kazakhstan oil and gas field industries, and will show government strategies against foreign investors. Finally, the last chapter will conclude with the summary and implications of the study. 2. Literature review Over the past years the endowments of Foreign Direct Investment (FDI) are becoming to be very important issue for transition countries. As the FDI activities contribute certain volume of assistances to the national economic growth. However the issue of FDI activities are often stands to be as the implicit hypothesis, in terms of its flows that transports benefit to the host regions economy. The impact of such disputes generally depends on FDI forms behaviour that it takes. The several evidence of empirical literatures have drawn series of positive and negative features of FDI as a basis of assistance growth for transition regions, some of which are examined below. The article by Kozima ( ) has expressed a macroeconomic explication of the FDI behaviours. Kozimas observation analysed that FDI ought to operate as channel trade for the productivity goods and thereby its direction should be followed by the market forces rather than the micro level characteristics. The FDI flows transfer and promote productivity level growth in terms of technology, management skills and know-how from the developed industries to the developing industries. As the outcome of such investment types follow by the improvement of the welfare conditions and by the increase of the industries income. The case can describe the Japanese FDI activities in Asian regions. On the other hand, in some terms FDI activities correspond to negative effects of its location decisions. This presents the case of the presence of more technology advantaged foreign company in an emerging country, where domestic industry might not be comparatively competitive and efficient to compete with the adv antaged foreign company. Therefore, the presence of more advantaged foreign company under such conditions can simply take over domestic firms market shares and decrease countrys economic welfare growth. The case explains by the United States FDI activities after the second war. De Gregorio (1992) stated that FDI may bring several benefits that persuade economic development by its advanced technologies and skilled knowledges, as such factors may promote productivity growth in emerging regions. De Gregorios studies have estimated several facts on economic growth in Latin America. This followed by increasing investment growth which is approximately implemented 0.6 per cent of GDP growth annually from 1950 to 1985. Likewise, Blomstrom and Lipsey (1992) examined FDIs positive externalities. However, such estimations studied under certain conditions that followed by high performed regions and therefore implemented positive performances. According to their studies, countries that only have attained certain level of returns can benefit from FDI activities. This can be correlated to human capitals that provide different income returns in transition regions. As well educated and skilled labour population can utilize the benefits of advanced technologies to the whole economy. The model of Malign emphasizes the potential interaction among FDI that realized by foreign company under the imperfectly competitive industry and a host region with imperfectly competitive domestic market. Hence the foreign firms operation in such market faces with several barriers to gain access into a market, and thus this increase market concentration instead of decreasing. (Cardoso and Dornbush 1989; Grieco 1986) In this term the presence of foreign company can simply turn down domestic savings and investment capacities by taking out rents and funds activity. Moreover, such case can basically trough out domestic firms from local business activities. The international firms might reinvest their capital flows to related industries in the host region and expand their market powers. The repatriation of such reinvestment profits may take out capital from the host region. Far from providing an encouraging impact on profits distribution and social environment improvements by foreigners might sustain a small power of local business partners and suppliers. As they utilize inappropriate intensive technology that might generate small number of labour forces, whereas consigning employees to the category of the unemployed, and this turns down them to set up more productive occupations. Their rigid control over advanced technology and skilled management channels may put off the favourable spillovers and externalities. It is commonly acknowledged that attracting FDI spillovers promote development effects, as the FDI activities symbolize as an essential source of technological spillovers, and as one of the resourceful and practical tools for improvement and upgrading of transition industries. (Dunning and Narula 2004) In fact, FDI spillovers have been enthusiastically supported under the Washington consensus as a universal remedy that leads economic growth and expansion. Because, structural changes highly amalgamate macroeconomic stabilization strategies along with strategies that increase FDI flows. However, the benefit levels are considerably various and the results from FDI assistances procedure are not always positive. (Lall and Narula 2004) Aitken and Harrison (1999) estimated the spillover effects to domestic companies in Venezuela. They investigated exceptionally limited effects of spillovers level. In addition, this spillover levels were mostly delivered from joint ventures. This suggested that relations among foreign and domestic company produce some amount of spillovers. However, its effects can not capture the whole economy. This can be explained when the foreign company in some way induced productivity growth but its financial sector would not be able to capture the plant stage, although it ought to capture even at the aggregate stage. The effects of political intensity have been examined by several policymakers and suggested that relationship among FDI inflows and host country firstly based on the political stability. Alesina and Perotti (1996) examined the impact of political vulnerabilities on economic development and investment. They implemented that an increase of the political intensity in the host region leads to decrease of investment flows. By implementing index of political instabilities that stands beyond of political assassinations, corruption and coups. Campos and Nugent (2002) analysed the causal linkages among investment and growth index by utilizing pooled panel statistics. According to their investigation results, it suggested that there are not so many evidences for the negative linkages among political instability and GDP growth. However, in terms of investment facilities, there are strong causalities of political vulnerability to investment decline. The relation among political volatility and asset markets has been examined by several policymakers. Robin, Liew and Stevens (1996) have examined factors of political volatility in transition regions. According to their analyses the importance of asset returns stands to be more significant in transition regions than in developing regions. As Bussiere and Mulder (1996) implemented their investigation in the twenty three regions and proposed that political vulnerabilities in economic models broadly explicate economic decline the aptitude of economic model to explicate economic decline of transition region. Moreover, they stated such conditions are vulnerable to economic crises when election consequences under uncertainty. Kutan and Zhou (1995) investigated that political intensity in Poland during 1990s had introduced economic reforms that influenced foreign exchange returns and bid-ask spreads. According to their investigation, these events reflected by political volatility that seriously harmed the national currency value in international exchange market. This consequently boosted the bid-ask spreads under the foreign exchange transactions that formulated bid-ask spreads to be more expensive for foreign investors. Likewise, Melvin and Tan (1996) examined political volatilities on foreign exchange market by their studies that implemented similar causes. Ivo Feierabend and Rosalind Feierabend (1966) formulated their Feieraben measure on political instability. This theory based on the countrys political vulnerabilities that considered the amount and concentration of political aggressiveness behaviour that takes place within a nation. According to their definition on political instability it is: the amount of Aggression directed by individual or  groups within the political system against other groups  or against the complex of officeholders and individuals  and groups associated with them. Or, conversely, it is  the amount of aggression directed by these officeholders  against other individuals, groups, or officeholders within  the polity. Using this characterization Feierabends have examined various indicate scales of political vulnerability that based on the amount and concentration of political actions. Feierabends have segregated thirty categories of political actions that were given by various weights. As the more destabilise actions, then the higher influences it obtains. For example, during the election of public servants is estimated to be zero, as this was not followed by aggressiveness of political intensity. However, in cases of assassination of high politic figures, corruptions and coups had estimated up to 5 and 7 scales. In the case of locational decision of foreign companies the political intensity of host regions might lead them out off their domestic market. Aharoni (1960) and Thunell (1977) showed that the intensity of political instability might be very significant measure in the foreign investment activities in the way of location decision. This has been examined that foreign investors in general consider the political vulnerability of the host regions in an unsystematic way. However, a foreign company that operates abroad should put forward its attention on political intensity. This would facilitate in the formulation of tactic for choosing the location and expand further its investment flows. As in some circumstances the host governments might change their political intensity in terms of nationalization. 3. The role of FDIs The priorities of developing economies are obviously comprise under constant revenue growth for their economies through strengthening technological capabilities, increasing investment rates, and enhancing the competitiveness of their production in the global marketplace. By providing the opportunities to economic growth, creating employment potentialities and conserving the environment for future population. As the globalisation and liberalization of the world economy constrains the developing economies to upgrade abilities and resources of their economies. The modern global can be classified by speedy progress in knowledge and economical capability under competitive circumstances. Therefore, in globalizing world the economic growth can be implemented constantly only if states can promote privileged value-added performances to supply goods and services for their open market strategies. Among these attitudes MNEs and FDI activities can apply for an essential function in complementing their efforts. As their assets is one of the main features of promoting local markets or entire enterprises to the international market. FDI has been characterized differently by several empirical literatures. The International Monetary Fund (IMF) describes FDI as an investment made to acquire a lasting interest in a foreign enterprise with the purpose of having an effective voice in its management (Bjorvatn, 2000). Generally, FDI activities are undertaken by Multinational Enterprises (MNEs) that provide a huge capital of investment flows over the world. These investment flows classified as a market seeking, its purpose to serve for an existing market. For instance, owing to a high tariff rates, the company needs to relocate its activities to the emerging country, as firms activities were previously supplied by exporting. The motivation for such investment in the host economy explains in better serve for a local market through production, market growth and market size. The case of Japanese FDI in vehicle production in the US can be implemented as the market seeking (Duning, 1993). The efficiency seeking appears with a firm that involves in gaining economic scale and scope activities from the host economy. In this perspective, close relations with the western countries would lead to corporate network linkages and the presence of high transport and communication costs will encourage more of efficiency-seeking FDI. Finally, the asset seeking or resource seeking occurs when a firm invest into a foreign country to find natural and low cost labour force resources that not available within their country. It might follow by natural resources, cheap labour forces and furthermore, by raw materials. Again the case of the UN and Japan can present the view of asset seeking by searching for a cheap labour force in Asia. In contrast to market seeking, it is able to serve for a home and for a third countrys market. This tendency follows particularly by industrialised sectors that subsidized by MNEs. Therefore, such accessibilities in physical infrastructure and skilled and cheap labour forces are the main trends of resource seeking. 3.1. FDI types In analysing market entry through FDI flows, there two choices such as, greenfield investment and takeover of an existing company. Through greenfield investments a company which invests a small amount of inputs, and afterwards when demand increases it can enlarge that investment. A greenfield investment frequently sets up from building a new company after the governments of host countries would approve that, because of the location perhaps can be in the profitable place and produce a new production capacity. In discussing another type of FDI is the takeover of an existing business through the acquisitions and mergers (MA). In other words, foreign companies appear in the emerging countries and purchases already existing local business by gaining the packages of the company, as a result, such companies turn out to be an affiliated. In the past years MA have seen massive surge by reaching more than 50 per cent (Theodore 1998). Admittedly, there are several trends that foreign firms seek to invest their capitals abroad. These features were partly analysed by Dunnings OLI theory. As Dunning (1993) describes three conditions that firms carry to take FDI activities. Ownership advantages- appears, when the foreign firm is capable to compete with the domestic firm. It can be attained through specific skills or assets that follow by advanced management and technological capabilities. Companies that endowed with ownership advantages basically enlarge their operations in a foreign country to internalize the growing benefits from ownership advantages. Location advantages- aspects as natural and mineral resources, transport costs and low prices, access to the domestic market determine the presence of the investment. Moreover, factors such as social and political stability and business environment that follows by stable prices and sustainable budget deficit determines location. Internalization advantages- occurs, when the foreign firm is able to retain its multiple activities, rather than licensing or franchising technology to local firms. The case can be implemented, when the firm prevents the technology or assets imitation by rival firms. According to OLI theory, all these criterions should be fulfilled for firms to invest in the host economies. In terms of investment incentives, Dunning (1993) pointed that OLI theory is generally stands for a characteristic of the host country and for the MNEs. This follows by attracted or specific location, skilled or cheap labour forces, infrastructure and political stability. Undoubtedly, these trends are very significant for the location of FDI assets, however, the significance of investment incentives have raised in the past years. Over the world countries have lowered their entry barriers to persuade a massive amount of foreign subsidizes and generated FDI incentives to attract more foreign investment flows. Therefore, operations such as low taxes, attractive tariff regimes, and market preferences, investment in infrastructure, financial grants and loans for the foreign firms took the form of investment incentives. Basically, FDI incentives are similar in developed and developing regions. Regarding to UNSTAD (2001), a small number of regions participate for FDI activities without subs idies nowadays. This report estimates that 95 per cent of adjustments in FDI legislations for the 1990s were encouraging to foreign companies and furthermore, these adjustments followed by FDI promotions and incentives. The motivation of such reasons primarily tended by prospect of seeing positive spillovers inflows into host economies UNSTAD (2001). In the context of positive spillovers host governments tries to attract foreign subsidizes to their economies as they considers that FDIs spillovers generate positive externalities to the domestic companies by transferring know-how and advanced technology. The following terms can be implemented Domestic companies might benefit from foreign production processes as they diffuse new technologies. It can be implemented through labour turnover and through imitation. As the foreign firms gain access into domestic market equilibrium, it is makes domestic companies to be more an incentive to protect market shares income (Ponomareva, 2000). These systematic alterations might cause various sorts of spillovers that bring to productivity growth into domestic companies, as the spillovers effects from foreign companies can be significant. On the other hand, several literatures provided that spillovers effects can have negative forms. In article by Aitken and Harrison (1999) the negative impacts of spillovers introduced on the domestic firms productivity, in terms of market steeling effect. For example, when the foreign company gain access to the foreign market and take over local market shares by its technology advantages. In other words, the MNEs advantages can simply trough out domestic firms productivities and so, local companys productivity declines. 3.2. Spillover activities and types. There is a large empirical study that implements the significance of spillover activities in the host economies. According to Blomstrom and Kokko (1997), the importance of the FDI spillovers is not only the investment in a new plant and equipment, but also transfers of technology, skills and capital for the host countries. Consequently, FDI arrives through managerial and financial resources, technical support and strategic assets. This can be companys brand name that takes place by comparative advantage to domestic entrepreneurs. Spillover activities can be taken during foreign companies presence that provides efficiency and productivity to the domestic firms. The positive spillovers followed by foreign investment enterprises that provide benefits to domestic companies, in terms of productivity technologies that do not exhaust cost for gains (UN-ECE, 2001). In the perspective of the FDI spillovers, several policymakers have concerned that the presence of foreign firms lead to productivity growth of domestic companies. Whereas, other authors implemented that, there is also a negative impact of FDI spillovers. One of the common explanations of FDI in transition regions is assistance in restructuring domestic firms. As Wallner (1998) suggest that, partly an emerging firm occurs under the soft budget constraint and thereby FDIs activity might provide in a positive way. As the presence of the foreign firms provide various incentives to reduce funds to domestic companies and as a result involves in companies restructuring. Another positive feature of FDI spillovers importance is transfer of technology and know-how to domestic firms. On the other hand, this can also provide negative spillovers. For instance, in terms of product market under imperfect competition, that can follow by a considerable decrease of the market shares of the local firm s and moreover, can trough out domestic firms from the market. The literature by De Gregorio and Lee (1998) and Kokko and Borensztien (1994) stated that FDI spillovers can generate in positive way, if only the technology development among foreign and domestic company is not so great. The trends of positive spillovers were found in the next literatures Blomstrom, Sjoholm (1999) in Indonesia, Caves (1974) in Australia and Globerman (1979) in Canada. In the case of negative spillovers the following studies such as Kornings (1999) in Poland and Romania and Aitken and Harrison (1999) in Venezuela have implemented such effects Spillover activities determine two approaches such as direct and indirect approach. The direct approach examines through statistical examples, as the spillover activities are directly correlated to presence of foreign firms (Blomstrom et.al.1999). The purpose of the direct approach frequently leads to productivity measure of local firms to the MNEs presences. There is on common method that utilizes evaluation of production functions that estimates through the foreign firms presences upon industry productivities and on its levels. In studies of econometric the spillover activities might expose the total impact of productivity to host firms under the foreign presence. However, the impacts are frequently not specific nor implement its effects (Blomstrom and Kokko 2003). The indirect approach examines through channels in which FDI spillovers may take in, and afterwards estimate the forcefulness of those channels. Likewise direct approach, there is a large studies on its channels, but it can be difficult to implement general conclusion from these studies (Blomstrom et.al.1999). Another spillover activity in the host industries persuaded by two types such as inter (vertical) and intra (horizontal) industry spillovers. The vertical spillovers appear when foreign company provide impacts to the domestic suppliers. This can be under different industries that engaged in a long term contract among foreign company and a domestic supplier (Smarzynka, 2002). The horizontal spillovers result from the occurrence of the MNEs that brings competition to the host economy. There are five channels that chase horizontal spillover activities such as competition, transfer of technology and RD, industrial management, demonstration and imitation activities and human capital and labour turnover (Blomstrom et. at. 1999). According to UNECE report (2001), on intra industry spillovers in transition regions have estimated FDIs horizontal and vertical impacts. The following (Table 2) estimated that basically the presences of foreign companies did not perform better and thus, they have not generated the expected positive spillovers to local companies. Virtually, the FDI spillovers turned to be negative in these manufacturing regions. Generally, CEE regions were under negative coefficient performances. The exception was followed with Estonias and Russias manufactures which are presented positive coefficients. The results suggested that it is not unexpected as the initial conditions and economic environment was critical during the transition period. Those countries essentially had experienced various shocks and thus, local companies were not capable to react to the challenges that followed by FDI. This however, can be temporary factors and these regions will be more competitive with the next FDI flows. 3.3. FDI flows in transition economies. Over the decade ago the former Soviet Countries and central and eastern Europe regions have been transferred themselves from centrally planned system to open market economy. This systemic transformation has seen a massive upsurge in FDI inflows that afterwards assisted to recovery their internal economic vulnerabilities. As the initial stages of economy conditions experienced several economic shocks and therefore domestic growth of these regions went down. According to UNECE report (2001) the industrial productivity decreased by 34 per cent over the transition regions. Furthermore, in some regions it even followed by 64 per cent. This economic collapse was stated by macroeconomic imbalances, monetary overhangs, and by external debts. Consequently, these host regions were under extremely necessitate of liberalization, privatization and stabilization reforms that followed with the foreign subsidizes. There are strong evidences that FDI tends to boost the initial stage of economic perfo rmances. The following trends were considered such as, FDI frequently helps to the host country to amalgamate into the global economy. FDI increases the aggregate rate of investment. FDI generates transformation of hard technology that process technology and product. FDI engenders relocation of soft technology that processes organization, management and sourcing technologies FDI tends to encourage networking and subcontracting patterns that conducive for host firms to improve their technologies and productivities. (Dyker 1999) Thus, the importance of FDI in these regions was not only in supplying funds for the acquisition of new equipment, but also it seen transformation of advanced technology and organisational forms that led from more developed economies. Attracting FDI assets are considerable issue for the transition regions, as it leads to catch up policy with more developed economies by improving their economic efficiency. According to Transition Report (EBRD 2007), in the past decade the former soviet regions and central and eastern European countries have been successfully stabilized their economic circumstances. As their living standards have improved and moreover political, social, economic and legal issues were adopted and improved by state agencies. The transformation processes however implemented in different stage as their initial conditions were varied over all regions. Some of regions have simply been mistreated by foreign investors as the investment inflows directed more toward to some regi ons. (EBRD, 1999, Henriot, 2003) This discrepancy might be implemented by the high economic dynamism of more advanced transition economies. There are some regions that have been under the greater concern to investors due to of their mineral wealth resources, and close frontiers to the European Union countries. Moreover, in the last 10 years, it was obvious that foreign investors were in favour to a more stable political economy and to a favourable environment that had followed a consistent privatization policy (Henriot, 2003). According to table the following four regions experienced a large amount of FDI flows. It is clearly seen that Hungarys state was dominant in foreign investment flows. Its economic condition was greater then in other regions and furthermore political relations with the western countries brought attention of foreigners. As the view of Hungary implemented beneficial infrastructure and economical ability to adopt foreign subsidizes. In addition, in its early sophisticated privatization strategy on state owned firms made favourable environment for foreign investors. Likewise FDI flows in Poland and Czech Republic also had experienced a fast growth. This rapid increase was experienced through acquisition of state owned enterprises that had involved foreign investors. The Slovaks FDI inflows entered later in contrast to Hungary, Poland and Czech Republic and therefore had the lowest rate. Although, in most cases its small sized enterprises were privatized by foreign investors. Through the government policy that could proceed with the well managed economic reforms and externa l relations with the neighbouring regions. The total stock of FDI inflows for country size by population and GDP analysed that Hungary and the Czech Republic have succeeded significantly then Poland and Slovak Republic. Nevertheless, these regions tended to recover faster in contrast to the CIS regions. In the perspective of CIS regions, FDI stocks remain with low attitudes, despite their performance in accomplishing macroeconomic policy and managing relatively high growth rate. (Table 2.1.) illustrates that regions such as Kazakhstan and Azerbaijan have chased the largest proportion of FDI stocks, whereas Tajikistan demonstrated the lowest amount of FDI stocks. Similarly, shares of FDI stocks in GDP for Azerbaijan and Kazakhstan have performed better. In terms of per capita of FDI stocks, regions as Kyrgyzstan and Azerbaijan have performed worthily, whereas Uzbekistan and Azerbaijan turned with the lowest rate. In comparing the result of FDI stock levels of Central European to Central Asian regions, the Republic of Kazakhstan, Azerbaijan and Russia were shown with the better perform attitudes. This impact followed with large inflows of FDI stocks in oil and gas fields. Nevertheless, these regions levels of FDI stocks are still smaller then in other central European regions. The case of such underperformance of the some CIS regions can be attributed by the tardiness in privatization, incapability and disinclination in reform strategies and inefficienc